- Joined
- Aug 31, 2007
- Messages
- 109
<H1 style="MARGIN-TOP: 0px">Vacancy rate through the roof: 8.5% mark highest in the province </H1>REMO ZACCAGNA - Herald-Tribune staff
<H5 class=grey>Posted 2 hours ago</H5>During the gas-drilling boom of 2005-06, finding an apartment in Grande Prairie was next to impossible.
But no longer.
Yesterday, the Canada Mortgage and Housing Corp. released the results of its Spring Rental Market Survey that showed Grande Prairie with an 8.5% vacancy rate – the highest in the province.
The vacancy rate as recently as 2006 was at 0.1% and has been climbing ever since.
The CMHC blamed rising unemployment in the wake of the slowdown in natural gas drilling – and subsequent drop in price to below $4 a gigajoule – as the main factor in the high vacancy rate in the area.
“There are a few factors working here. There’s a general slowdown in the economy that is impacting the demand for rental accommodations,” explained CMHC market analyst Richard Cho of Calgary.
Continued After Advertisement Below
Advertisement
$(document).ready( function() { if ($("#banZone")[0]) { //find out where the end of the initial script tag is. var cutoff = $("#banZone").html().toLowerCase().replace(/ /g, "").replace(/\r\n/g, "").indexOf("/script>") + 8; var adzoneHTML = $("#banZone").html().toLowerCase().replace(/ /g, "").replace(/\r\n/g, "").substring(cutoff); //get the remaining substring. Take the first six characters of that. var banzone = adzoneHTML.substring(0, 6); //If there is no banner data associated to that zone, the substring found //above will contain the closing div tag of the banner. If it has data, //there will be something else in its place. If no data, hide the banner. if (banzone == "") { $("#banZone").css("display", "none"); } } }); </DIV>Brian Bildson, owner of Prime Property Management in Grande Prairie, said the vacancy rate was higher than it should be, but that the figure released by the CMHC is an “artificial” number inflated by a flood of new units that have come onto the market in the past year.
“You had a bunch of speculators on condominiums in this town, hundreds of units that they thought they were going to flip and now they’ve thrown them on the rental market,” he said. “So, in a way, our rate is artificially high, but it still hurts the guys who aren’t receiving the rent.”
Bildson said Prime Property has been doing “reasonably well” in spite of the economic woes that have hit the city.
“But it’s a struggle, I mean you’ve got to work to keep the properties full,” he said.
The owner of CarVer Property Management said her business has also struggled in the past year.
“I still have renters who are coming in (but) it’s slowed down quite a bit. Before, there would be 10 applicants for one property and it’s gotten to where you may have 10 properties and maybe one applicant,” she said on condition that her name is not published.
Average rents have also seen a decline with the average rate in April at $914, down from $979 last year. The average rent for a bachelor apartment in Grande Prairie is $699; a one bedroom $818; a two-bedroom $969; and a three-bedroom unit $1,082. Cho said the vacancy rate is putting downward pressure on rental rates. Also factored into the drop in rent are promotions that landlord’s use to entice tenants.
“We’re finding that, in this sort of environment, landlords are doing more to attract renters, and this includes offering more incentives as well reducing some of the monthly rents,” he said.
However, Bildson said such promotions were “ineffective” and Prime Property has not offered any to its tenants.
“Our experience has been that promotions are a kind of a feeble attempt at getting people to come to your building,” he said. “At the end of the day, most tenants are sophisticated enough to realize that after that half-month’s rent is gone or that satellite dish is hooked up, they have to live in the place and pay the rent.”
Aurora Estates on 96 Avenue is offering $150 off the monthly rent, provided tenants sign a 12-month lease.
But even with the promotion, management is having problems filling up its units – both on the purchasing and rental side.
“Traffic has been really slow. We’ve got two buildings here. The first building came on stream last year and it filled up rather fast. This year, the other building is up and it has stopped; it’s not slow, it stopped,” said the resident manager, who spoke on the condition of anonymity.
Across the province, the vacancy rate in cities with a population of 10,000 or more stood at 4.6% in April, up from 2.9% last year. Average rents remained relatively steady from one year to the next, increasing from $953 to $962.
Bildson said he would be comfortable with a rate of between 3% and 5%. A balanced market, which favours neither the landlord nor the renter, is about a 3% vacancy rate,
“Historically, a 5% vacancy rate has been a rate that banks and lenders have been very happy with. We’re not that far off that mark right now,” he said. “That’s a healthy market, that’s a normal rate for a healthy city.”
Cho said he expects the vacancy rate to slowly decrease in Grande Prairie as the economy recovers as it is expected to later this year or in early 2010.
“I think as far as a trend for the year, the economy is going to slowly recovery, so with that we should expect the vacancy rate to also follow suit,” he said.
Bildson said he would take a wait-and-see approach.
“My gut feeling is that we’re going to have a very similar type market for the next six months and this winter will tell the story. And if we see an upswing in some of the resource-based activities that happen around this area … again you’re going to see the vacancy rates drop and the rents rise accordingly,” he said.
[email protected]
<H5 class=grey>Posted 2 hours ago</H5>During the gas-drilling boom of 2005-06, finding an apartment in Grande Prairie was next to impossible.
But no longer.
Yesterday, the Canada Mortgage and Housing Corp. released the results of its Spring Rental Market Survey that showed Grande Prairie with an 8.5% vacancy rate – the highest in the province.
The vacancy rate as recently as 2006 was at 0.1% and has been climbing ever since.
The CMHC blamed rising unemployment in the wake of the slowdown in natural gas drilling – and subsequent drop in price to below $4 a gigajoule – as the main factor in the high vacancy rate in the area.
“There are a few factors working here. There’s a general slowdown in the economy that is impacting the demand for rental accommodations,” explained CMHC market analyst Richard Cho of Calgary.
Continued After Advertisement Below
Advertisement
$(document).ready( function() { if ($("#banZone")[0]) { //find out where the end of the initial script tag is. var cutoff = $("#banZone").html().toLowerCase().replace(/ /g, "").replace(/\r\n/g, "").indexOf("/script>") + 8; var adzoneHTML = $("#banZone").html().toLowerCase().replace(/ /g, "").replace(/\r\n/g, "").substring(cutoff); //get the remaining substring. Take the first six characters of that. var banzone = adzoneHTML.substring(0, 6); //If there is no banner data associated to that zone, the substring found //above will contain the closing div tag of the banner. If it has data, //there will be something else in its place. If no data, hide the banner. if (banzone == "") { $("#banZone").css("display", "none"); } } }); </DIV>Brian Bildson, owner of Prime Property Management in Grande Prairie, said the vacancy rate was higher than it should be, but that the figure released by the CMHC is an “artificial” number inflated by a flood of new units that have come onto the market in the past year.
“You had a bunch of speculators on condominiums in this town, hundreds of units that they thought they were going to flip and now they’ve thrown them on the rental market,” he said. “So, in a way, our rate is artificially high, but it still hurts the guys who aren’t receiving the rent.”
Bildson said Prime Property has been doing “reasonably well” in spite of the economic woes that have hit the city.
“But it’s a struggle, I mean you’ve got to work to keep the properties full,” he said.
The owner of CarVer Property Management said her business has also struggled in the past year.
“I still have renters who are coming in (but) it’s slowed down quite a bit. Before, there would be 10 applicants for one property and it’s gotten to where you may have 10 properties and maybe one applicant,” she said on condition that her name is not published.
Average rents have also seen a decline with the average rate in April at $914, down from $979 last year. The average rent for a bachelor apartment in Grande Prairie is $699; a one bedroom $818; a two-bedroom $969; and a three-bedroom unit $1,082. Cho said the vacancy rate is putting downward pressure on rental rates. Also factored into the drop in rent are promotions that landlord’s use to entice tenants.
“We’re finding that, in this sort of environment, landlords are doing more to attract renters, and this includes offering more incentives as well reducing some of the monthly rents,” he said.
However, Bildson said such promotions were “ineffective” and Prime Property has not offered any to its tenants.
“Our experience has been that promotions are a kind of a feeble attempt at getting people to come to your building,” he said. “At the end of the day, most tenants are sophisticated enough to realize that after that half-month’s rent is gone or that satellite dish is hooked up, they have to live in the place and pay the rent.”
Aurora Estates on 96 Avenue is offering $150 off the monthly rent, provided tenants sign a 12-month lease.
But even with the promotion, management is having problems filling up its units – both on the purchasing and rental side.
“Traffic has been really slow. We’ve got two buildings here. The first building came on stream last year and it filled up rather fast. This year, the other building is up and it has stopped; it’s not slow, it stopped,” said the resident manager, who spoke on the condition of anonymity.
Across the province, the vacancy rate in cities with a population of 10,000 or more stood at 4.6% in April, up from 2.9% last year. Average rents remained relatively steady from one year to the next, increasing from $953 to $962.
Bildson said he would be comfortable with a rate of between 3% and 5%. A balanced market, which favours neither the landlord nor the renter, is about a 3% vacancy rate,
“Historically, a 5% vacancy rate has been a rate that banks and lenders have been very happy with. We’re not that far off that mark right now,” he said. “That’s a healthy market, that’s a normal rate for a healthy city.”
Cho said he expects the vacancy rate to slowly decrease in Grande Prairie as the economy recovers as it is expected to later this year or in early 2010.
“I think as far as a trend for the year, the economy is going to slowly recovery, so with that we should expect the vacancy rate to also follow suit,” he said.
Bildson said he would take a wait-and-see approach.
“My gut feeling is that we’re going to have a very similar type market for the next six months and this winter will tell the story. And if we see an upswing in some of the resource-based activities that happen around this area … again you’re going to see the vacancy rates drop and the rents rise accordingly,” he said.
[email protected]