RLG 2024 Year End Market Update

Dear Valued Client,

As another year ends and we usher in the quarter-century mark of the 2000’s in 2025, we want to take a moment to express our heartfelt gratitude for trusting us with the management of your properties.  Your confidence and support are at the heart of everything we do, and we’re truly thankful for the opportunity to serve you.  In this year-end letter, we will look back at some key events and trends that shaped the rental market in 2024, share some insights into what we anticipate for the year ahead, and highlight a few of the successes we’ve achieved as a company this year.  We are excited to continue working together to make 2025 even more prosperous for your investments.

Over the past few years, the rental market in Calgary has experienced some significant movement.  2023, carrying over into 2024 saw rental rates on the rise in Calgary, carry on a multi-year trend beginning in 2021.  Rental rates peaked in June this year with the average asking rental rate for the city hitting $2,150/month, marking a multi-year high.  The rise in average rent can largely be attributed to a steady decline in the vacancy rate from 5.1% in 2021 to 1.4% as of early 2024, according to the Canada Mortgage and Housing Corporation (CMHC Housing Market Outlook Spring 2024).  Calgary, being relatively affordable compared to many other major markets in Canada, has experienced positive migration from those seeking more affordable real estate options, resulting in lower vacancy rates and higher rents. 

Over the last few months, we have seen some signs that growth in our hot rental market is tapering.  In August of this year we faced the first year-over-year drop in average rental rate, although modest at -1.1%, since 2021.  As we’ve now entered the slower winter season for the Calgary rental market, year-over-year rates have continued along that cooling trend with the most recent report from Rentals.ca noting a year-over-year decline of -6.8%  for asking rental rates in December (December 2024 Rentals.ca Rent Report).   Some of this change can be attributed to new housing supply being added to the rental market.  According to the CMHC, Calgary saw a record last year in new housing starts, with much of that driven by apartment and purpose-built rental construction, such as row housing.  Another variable that could impact rents going forward is slower population growth linked to the federal government’s new limits on temporary and permanent immigration.  Overall, this could translate to less pressure on housing.

Looking ahead, the question will be whether the current softening in the rental market signals a long-term swing or a short-term pause?  We feel it is important to reiterate and contextualize, that this latest dip in rental rates is coming on the heels of multi-year growth.  Despite changes to immigration policy on a federal level, the city of Calgary is projecting an estimated increase of 110,000 new residents between 2023 and 2028 (Calgary.ca – housing trends).  Our expectation is that with a growing population, including those relocating to Calgary inter-provincially, vacancy rates will continue to stay low notwithstanding the increase to housing supply.  We are optimistic for the coming year and expect strong demand and market leading rental rates for the properties under our management.

With our focus on high-quality properties in Calgary’s best neighborhoods we remain well positioned to capture the attention of corporate tenants relocating to the city.  Our portfolio currently has an average asking rental rate of $2,547, considerably higher than the market average of $1,990.  This reflects not only our commitment to achieving the best returns on your investments, but also our niche position in the property management industry; building our portfolio with the target audience of corporate tenants in mind.  Our strong relationship with corporate relocation agencies is evidence of our commitment to provide best in class service to this segment of the rental market.  This month we hosted our 10^th annual relocation agent’s luncheon, where we gathered with relocation agents from several firms to show our appreciation for their positive relationship with Residential Leasing Group.  The feedback we hear from them is: corporate tenants actively seek properties that are professionally managed, and Residential Leasing Group is their first call!  We are proud to have their trust, built on a 35-year track record, as we know it benefits you, our clients.   

 As we begin a new year, we are committed to serving you, with our core values of Integrity, Professionalism, Growth, and Teamwork guiding our efforts.  Thank you for your trust and business this last year.  We deeply appreciate your referrals and recommendations. Our business has grown thanks to referrals from our owner clients, tenants, and industry professionals, including real estate agents, who trust us to handle their friends, family, and clients’ property management needs.

On behalf of the team at Residential Leasing Group, we wish you and your loved ones a Merry Christmas, Happy Holidays, and wonderful New Year.

Sincerely,

Brad Currie

Broker & President

---