Year 2022 Year End Review & Year 2023 Thoughts
2022 Rental Real Estate Market Review
After two unprecedented years, 2022 saw the end to most COVID legal restrictions on landlords. These real estate restrictions were significant as they made it near-impossible to evict tenants under any circumstance and in some cases, it was even difficult to show properties that were tenanted.
Additionally, due to legislation introduced at the end of 2021, we feel the Residential Tenancies Act of Alberta has added complications and process expenses making it more difficult for landlords to challenge tenant claims on contested security deposit returns, early termination of fixed term tenancy agreements, and applications for rental abatements.
High inflation rates, labour shortages, and continued supply chain challenges have been contributing factors on rental rate increases in addition to an increased demand, but has also resulted in increased costs in ownership of rental properties through property taxes, property insurance expense, utility operating costs, repairs, maintenance, and condominium or home owners’ association fees.
2023 Rental Real Estate Market Preview
Through our relationships with tenants, real estate agents, investors, and property owners, we are able to gauge in ‘real-time’ what is happening in the local Calgary rental market. From the trends we are seeing in the current quarter, we expect the following for 2023:
- The Alberta Legislature continues to focus on tenant protection. In Alberta unlike many jurisdictions in Canada, there is no limit on how much a landlord can increase the rental rate, but a landlord can only increase rent after one calendar year has passed from either the beginning of the tenancy or when the last rental increase was made;
- The Real Estate Counsel of Alberta has mandated licensing requirements for condominium property managers that went into effect in Dec 2021, with full industry implementation to be completed by late 2023. This requirement for added training and higher skill level is likely to increase the cost of condominium property ownership, though the effects are likely not be realized to property owners until 2024 and beyond;
- Buyer demand for properties has remained steady in Calgary and we believe this trend will continue into the New Year. Higher oil prices and continued job growth in the energy sector should have positive effect on local real estate values. However, if the Bank of Canada continues to raise interest rates, this will have a dampening effect upside driving forces;
- With a positive influx of people into Calgary, primarily migration from British Columbia and Ontario taking advantage of the affordability and employment opportunities in Alberta, we anticipate positive influences on housing demand, both in sales and rentals that are likely to result in additional market based rental rate increases;
- With the addition of new rental inventory lagging behind tenant demand, higher rents may adjust how a segment of tenants view their lifestyle requirements; either by postponing previous intensions to "move up" to a larger property, pursue roommates to better utilize multi-bedroom properties, and even merge households or move back into family homes to offset their increased cost of living expenses.
Citysearch Rental Network has been serving our clients in Alberta since 1998, and on behalf of our entire team we appreciate our loyal clients. We take the responsibly of managing rental properties incredibly seriously and are grateful for the opportunity to manage such an important asset. We are always in need of a supply of quality rental homes in all price ranges, and always appreciate word-of-mouth referrals to our client's friends and colleagues who own their own investment properties.
Please do not hesitate to reach out with any questions you may have or to discuss your personal real estate portfolio in detail, and know that we will continue to be here for you in 2023, and the years ahead!
Lisa Hamielec, P.Eng.
Citysearch Rental Network Inc.