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Shamon Kureshi of Hope Street Management Corporation at a penthouse his company manages in Calgary, on March 21, 2022.Sarah B Groot/The Globe and Mail

Seven years after the economic recession that stunted housing prices in Calgary, the real estate market is finally showing signs of recovery. But while an increase in pent-up supply brings much-needed listings to the resale market, rental properties outside the city’s centre are becoming harder find, leading some Calgary renters to consider home ownership.

In February, Katie Gielen received an eviction notice from her landlord, as he would be selling the one-bedroom condo she’d rented since 2017 in Victoria Park, a neighbourhood located just southeast of Calgary’s downtown core.

Initially, Ms. Gielen was concerned about the availability of affordable rental units in a central location, as despite a higher number of rental properties, rental rates in this area also tend to be higher than Calgary’s average. “I’m on disability, so I’m on a limited income,” she says. “And since I last looked [for a rental] about five years ago, rental prices have gone up.”

Indeed, despite an increased range of rental choices, finding a suitable rental in Calgary’s hot housing market is not an easy feat. Since August last year, the number of vacant rental units across the city has consistently declined, while rental rates in February were roughly 10-per-cent higher than last year, according to data from Rentfaster. And conditions are especially tight for Calgarians who, like Ms. Gielen, are on a lower income, a recent CMHC report shows.

Some of the loss of rental units in Calgary can be attributed to “accidental” landlords putting their properties back in the market, says Shamon Kureshi, president and CEO of Hope Street, a Calgary-based property management company.

“Unfortunately, for the last 10 years in Alberta, the market hasn’t been very favourable for sellers,” Mr. Kureshi says. “So renting out is a great way to help [homeowners] cover the monthly expenses that are attached to that house.” But now that the market is recovering, he notes, “we’ve lost a lot of rental inventory because of those owners selling.”

On March 1, the Calgary Real Estate Board (CREB) reported a total residential benchmark price of $499,400, that’s more than 20-per-cent higher than at the start of the pandemic, and the highest since 2014. In February, CREB also registered a record number of sales, driven by a surge in new listings. Some of these new listings, presumably, would have been from pent-up sellers with properties in the secondary rental market.

“Our inventory of available [rental] listings is very low, perhaps the lowest it’s been in several years,” Mr. Kureshi says. “And the properties that fit into the high-demand categories – properties that are not in the downtown – are usually rented the same day we list them.”

According to Matthew Boukall, vice-president of product management at Altus Group, “the interplay between the secondary rental market and the resale market is a reflection of the economy.” And as economic growth in Alberta shows positive signs, the housing market in Calgary is in an upward swing.

“Appreciation is driving some decision making,” Mr. Boukall says, noting that for landlords whose properties have gained value and are looking to exit the rental market, “now would be a great time to sell, as listings are low on the resale market.” However, he adds, a tightening rental market is also an opportunity for remaining landlords. “The market is fairly responsive, so if rents rise, we will see more supply come in.”

But what’s welcome news for homeowners and investors, isn’t ideal for tenants who worry about their prospects in a tight market. In mid-February, Mary Nelson and her husband (whose names have been changed for fears of jeopardizing their current lease) learned about their landlady’s intention to sell the 1950s bungalow whose main floor they’ve been renting since 2020. The property had already been listed last summer, but after 90 days in the market, the listing was withdrawn and the Nelsons were nudged by their landlady to extend the lease for another year.

“She was really pressuring us to re-sign for another year,” Ms. Nelson recalls, noting that this made her and her husband feel confident the property wouldn’t be listed again until the end of their lease in the summer of 2022. But their landlady had a change of heart – and this time the 1950s bungalow sold within a week.

“Once the house was conditionally sold, that’s when the panic kicked into gear for us,” Ms. Nelson says, as according to the Alberta Tenancies Act, tenants have 90 days to vacate a property upon notice. “Unlike last year, [when the house didn’t sell] we actually had to figure out what we were going to do.”

Because of the cyclical nature of the Calgary market, this is a time when buyers, sellers and renters all have to make quick decisions, says Mr. Boukall. “People who didn’t want to make a choice are going to be forced to make one; and people who have been waiting to make a choice, because the market has been slower, can go out and make one.”

And in the face of their unexpected eviction, the Nelsons are indeed pondering their choices.

As the cost differential between renting and owning levels up, the Nelsons are now considering home ownership. “The rental market is such that it can be really challenging [to] find a place that actually works for you,” Ms. Nelson says. “And then we realized that, with all of our savings, we might actually be able to purchase a townhouse or condo.”

While there’s not necessarily a correlation between evictions and home ownership, Mr. Boukall notes, “there’s going to be more housing decisions that need to be made, because of the strength of the market.”

But not all renters have a choice.

“I can’t afford to buy my own place, so I’m at the mercy of the [rental] market,” Ms. Gielen says. While she qualified for a subsidized unit in a purpose-built rental in Montgomery, this northwest neighbourhood wasn’t her first choice. “I was looking at Bankview, Crescent Heights, Mission,” she says. “But [for] the amount I could afford, I was looking at places that weren’t very good.”

Her new place, however, offers something that rentals in Calgary’s secondary market do not: long-term stability. “I specifically went with a bigger company so that this wouldn’t happen again,” Ms. Gielen says about her landlord selling the unit she rented. “I’m hoping I can stay there for a long time.”

According to Mr. Boukall, the challenge with the cyclicality of the Calgary market is that it prevents property owners from selling when they’d like to for the price they want. “So when these opportunities come at you, people are just going to take advantage of the fact that there’s a lot of demand for real estate in Calgary now.”

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