Calgary's red-hot rental market may be cooling

Calgary's rental market has gone through a major shift in recent years.

While Calgary is still relatively affordable compared to Toronto and Vancouver, large swaths of people moving to the city in search of cheaper real estate have squeezed vacancy rates and pushed rental prices up at a faster rate than anywhere else in the country in 2023. 

But some say the height of the market may have come and gone, and that the trend of rapid growth now seems to be tapering off.

"We have to be realistic — I think we have peaked here right now," said Mike Bucci, vice-president with the Western-Canada based Bucci Developments, speaking on the sidelines of the Calgary Real Estate Forum this week. "Renters have choice now."

Rentals.ca data shows rents in Calgary have declined over the past two months, a shift that's all the more striking given the dip happened in August and September, said Giacomo Ladas, the website's associate director of communications. 

"Typically, August is the busiest rental month because that's where you get the surge, especially students who are looking for permanent rentals," said Ladas. "That didn't really happen in Calgary." 

Another indicator: Some property managers have started offering move-in bonuses and other incentives, Ladas said, which had gone by the wayside during the peak of the competitive market.

Kyle Dovigi, a Toronto-based real estate broker who invests in the Calgary condo market, said he, too, has noticed a change.

"Rents were incredibly strong — probably the highest they've ever been — earlier this year," said Dovigi. 

"Fifteen people [would] be going to see a unit at a time. It would be renting the day that it gets posted … that has definitely weakened over the last six months," he said, though he noted prices remain "very strong overall."

A similar trend has unfolded at a national level with rents across many major cities dipping in recent months, while smaller markets have seen more growth.

Demand for rentals has been on the rise in Calgary, but so, too, has new housing supply. 

Last year, Calgary saw an all-time record in new housing starts, according to the Canada Mortgage and Housing Corporation, much of that driven by new apartment construction.

Mark Parsons, chief economist at ATB Financial, said the construction sector has been playing catch-up in response to demand for new housing driven by the province's population boom.