Headlines continue to inform us rather harshly that housing sales are down. According to Canadian Real Estate Association figures, Alberta experienced a year-over-year decline in MLS sales of almost 35 per cent, while prices dropped by 4.2 per cent to $338,354. And new construction is also drastically down.
That means a big increase in the number of people renting accommodation.
Bob Dhillon, president and CEO of Calgary-based Mainstreet Equities has a good handle on the rental market--his company owns more than 5,600 units across Canada; 1,300 of those in Calgary and 1,800 in Edmonton.
Mainstreet serves the mid-market range and Dhillon says that his business has been very good over the past while. But the majority of his renters are due to a continuing in-migration of people from Ontario and Quebec where the economy is causing some to seek their fortune further afield.
Dhillon says that sector has been particularly strong over the last quarter but yet has been far outweighed by foreign contract workers.
The majority of his new renters are from Mexico and the Philippines; they find it easier to rent for the time they are working in Canada. He has 17 men from the Philippines working for his own company, which includes a construction division.
Mainstreet specializes in purchasing apartment blocks and upgrading to today's high environmental standards.
Although he owns units from the coast to Ontario, Dhillon says he is concentrating on the Alberta market, where he finds a good amount of rental stock for sale.
His latest acquisition is a 48-suite block in Cochrane--one of Canada's fastest growing cities.
Cash position is excellent and Mainstreet is taking advantage of the decrease in share value to buy back its shares for $6.25 (they currently sit at $5.83).
City Search caters more to the executive renter and it also reports a thriving business.
Canada Mortgage and Housing Corp. says that Calgary is the most expensive city in Canada for rental properties. Our average is $1,148 per month for a two-bedroom apartment (the same apartment would be $1,095 in Toronto).
But that figure is low according to the type of accommodation that City Search leases and manages.
It does have condos in the $1,200 to $2,000 range, but most of its properties are in the west downtown and Eau Claire districts, which fetch quite a bit higher.
Most newer condos in those areas can ask between $1.75 to $1.90 per square foot, which is down about 30 cents from last year. Furnished units rent for around $2.50 per square foot but in today's market, there is a fair amount of negotiating going on.
Armelle Kilpatrick, associate/vice-president property management, says most of its clients are executives and engineers on contract to Calgary companies, generally for two to three years. She says employers today encourage contract workers to rent rather than buy, which avoids having to help sell homes should they want to relocate them to another area.
Many come from the U. K., France and India, and those from the U. S. are happy to rent instead of trying to sell their homes back in the States during this depressed time.
The company currently has around 250 condos, town houses and houses in its portfolio, with most of the single family homes being in the Mount Royal, Rideau/Roxboro, Britannia and Elbow Valley communities.
Its 15 homes in the Mount Royal area are rented out for monthly costs of between $6,000 to $8,500 unfurnished, but partially furnished houses realize from$8,500 to $12,000.
Kilpatrick says people owning property in the more exclusive areas of Calgary are shying away from selling right now, so using an agency like City Search to lease, collect rent and manage makes such good sense.
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But to get down to our average of $1,148, there must be many apartments, duplexes and houses available for a lot less and a quick check with the Herald's classified section shows a number of suites available for way under that mark.
Within walking distance to the downtown office core you can find several in the $750 to $1,000 range and even homes in outlying districts for around the city average.
David Parker, Calgary Herald
Published: Saturday, December 20, 2008
http://www.canada.com/calgaryherald/news/lifeathome/story.html?id=c6fc35da-8a85-491f-975d-998389a8f1a7