Vacancies more than double
Calgary's apartment vacancy rates might have more than doubled in the past year, but the cost of rent has edged up since then.

Figures compiled by the Canada Mortgage and Housing Corporation (CMHC) show vacancies last April hit 4.3% compared to 2% the same month in 2008 -- a trend the organization attributes to the recession.

Even so, the average rental rate for a two-bedroom suite went from $1,096 a year ago to $1,106 this past April.

And renters shouldn't expect rates to fall significantly in the coming months as the economy stabilizes and vacancy rates fall again, said Lai Sing Louie, senior CMHC analyst.

"We're looking at an average rent rate in October of $1,075," said Louie, adding that number will rise slightly to about $1,100 in 2010.

In general agreement was Gerry Baxter, executive director of the Calgary Apartment Association, who said rising utility and labour costs have limited landlords' ability to lower rents.

"You've got to be able to pay your bills and keep your building in shape, otherwise you're out of business," he said.

Up until 2005, landlords largely held the line on rental fee hikes and only made up for the widening overhead gap after that, said Baxter.

And rental rates have retreated since last October when they averaged $1,148, he said.

"I'm hearing anecdotally they're lowering rents now and there are incentives -- two years ago incentives weren't being offered," said Baxter.

Some of those incentives have included free amenities such as cable TV or rent reductions.

The economic downturn had dried up the numbers of prospective renters, said Baxter, making it more of a consumer market.

Landlords have been pressured by the ability of renters to purchase suddenly more affordable houses, said Louie.

The CMHC is predicting a 3.5% vacancy rate in the Calgary area for the early part of 2010.