The increase in residential rental prices last month has highlighted Grande Prairie in the top five secondary markets for annual rental growth.
According to the latest Rent Report from rentals.ca and Urbanation, the cost of a one-bedroom unit on average cost $1,238 in February, up 13.9 per cent from the same month the previous year. A two-bedroom unit on average cost $1,439, which is a 8.7 per cent bump from February 2024.
Secondary market growth
Associate Director of Communications at Rentals.ca Giacomo Ladas said Grande Prairie has recorded record annual rent growth of 10.3 percent. He said the reason for this increase is the same for not just Grande Prairie but secondary markets across the country, where asking rents in major cities have become so unaffordable that people are having to leave these major cities.
“There’s a huge deprioritization of living in downtown metro cores right now and they’re moving to these other areas. So an area like Grand Prairie [there is a] 10 percent increase, we’re seeing Quebec City with a 12 percent increase. A lot of people are moving out of Montreal and going to Quebec City.”
In Alberta, other secondary markets that are seeing an increase in annual rental rate growth include Lethbridge with an increase of 9 per cent and Medicine Hat with an increase of 8.9 per cent. He says with the increase of people coming to the city the supply isn’t able to keep up, resulting in the price increase currently being seen.
Across Canada
He says across the country there is a multi-decade high being seen in general for apartments coming onto the market increasing the current supply, plus a slowdown in population growth on the national level and “the softening labour market and weakening economy” creating a formula for the rental prices to decrease nationally.
“Nationally rents have gone down in a lot of our major cities rents have gone down so when those three things happen that’s really how we get to where we are now where rental prices are at their lowest level since July of 2023.”
He said with the current trade war between Canada and the U.S. there could be several outcomes that could impact rental prices. This includes the possibility of Canada’s unemployment levels rising, which could lead to an increase in turnover and people moving out of their apartments, creating a higher rental vacancy rate.
“This could potentially have the effect of bringing rental rates down but at the same time, there could be an effect on housing development which could again have the impact of less supply coming to the market which could pull prices up. This is an unprecedented time where it could bring rental prices down because people can’t afford to live in apartments anymore and everyone’s moving out but it could also see rental prices really increase, as housing development crawls to a halt.”
Looking to the future
He says looking toward the future there are a lot of unknowns and uncertainty at this point. However, he says Wednesday’s announcement from the Bank of Canada on decreasing the interest rate could be a positive for development.
“What this does if interest rates get cut is it’s cheaper for developers to build and that is a huge reason why costs have gone up. Developer prices have skyrocketed just for everything, labour, lumber, all the red tape fees,” Ladas said. “So the big thing is to get those prices down, and if those prices don’t come down, obviously it’ll get offset to the consumer.”
He adds if interest rates continue to decrease it will be a good thing for the industry as a whole.
