Condo Apartments in Edmonton’s Rental Market
December 03, 2014
The private rental of condominium apartments make up a major portion of Edmonton’s secondary rental market. According to the Canadian Mortgage and Housing Corporation’s Housing Market Outlook (CMHC), almost one-third of condo apartments in Edmonton were in the rental market in the spring of 2014.
Increases in employment prospects, rising income levels, and record-high migrations to Edmonton from across Canada and other countries have created an elevated demand for rental housing in the capital region. The influx of newcomers has also caused a decline in vacancy rates and an increase in average rental rates. According to the report, the vacancy rate for condo apartments is hovering just over 1 per cent, indicating a strong demand for this kind of housing and allowing private condo apartments to become serious competitors in the rental market.
Condo owners are benefiting by putting their units on the rental market. Market reports issued by Rental Housing Business Magazine showed that the average apartment condo unit sold for $130,850 in 2013. The report stated that this number was brought up substantially by newly constructed buildings. The average price for a walk-up apartment unit, built prior to 1990 was priced at a low $110,300. Using the overall average cost of an apartment condo, a mortgage with a 25 year amortization period and 3 per cent interest rate, a condo owner would pay about $550 per month. The average rent in Edmonton is more than double that.
According to the report, the average rent for a two-bedroom apartment in Edmonton is $1,141, expected to increase to $1,225 by next year. Rental rates in more sought-after areas near the University of Alberta or downtown average $1,260. Private condo rentals are priced slightly higher than those rates as they usually come with higher-end interior features and more building amenities than purpose-built rentals.
Even after applying condo fees, utilities and other housing costs an owner of a condo-apartment could turn a profit, build equity and see a high return on investment by placing their unit on the rental market in Edmonton.
About Amy Hancock
Amy is a freelance writer and communications professional. Her insights and extensive familiarity with Edmonton make her a great guide for getting to know local communities.