HOUSING SUPPLY IS GOING UP, UP, UP IN CALGARY
It’s not your imagination! Nor ours. For those of us who drive around Calgary as part of our work day, there are new and larger rental buildings than we can remember seeing for years! Have you seen the development at 17th Avenue and 85th Street in the Southwest? Or all the new homes near COP? These are 2 locations that never had purpose-built rental housing before recent times. In many ways this is a great thing! However, as landlords we are watching this pattern closely, and with a bit of concern.
Before we begin, today’s blog is primarily about purpose-built rental units. This means that the developer and/or builder’s intention at the start was to rent the spaces, then re-finance their cost to build. The second point for our real estate investor colleagues to be aware of, is that each of our sources seems to have slightly different numbers; we believe this is related to the start-stop dates that are being measured. We recommend not getting caught up in exact data points, but rather the bigger (pun intended) picture.
We’ll start with the CMHC Fall 2024 Market Rental Report, released December 17, 2024. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/rental-market-reports-major-centres?selected=calgaryDiv. “Calgary’s stock of purpose-built rental apartments saw its largest annual increase (+10.0%) since 1990, driven by new completions and conversions.” According to this same report, Calgary’s population increased 5.8% over the same time frame. This brought the vacancy rate up from 1.3% to 4.8%. Digging a little deeper into the data, CMHC reports under 4000 purpose- built rentals in 2023, approximately 7000 purpose-built rentals in 2024, and then compares that to a 10-year average of approximately 2500.
Then we move to the Calgary Real Estate Board (CREB) data, where their experts report 9340 purpose-built rentals completed by November 2024. Another 5000 purpose-built rentals have been started. https://www.creb.com/-/media/Public/CREBcom/Housing_Statistics/2025_Forecast/2025_Forecast_Report.pdf That’s a lot of sparkly, brand-new apartments competing for tenants who might have otherwise considered a basement suite. Which one do you think Gen Z prefers—and no shoveling or yard work required. Just sayin’.
Avison Young, yet another very reputable data source, also reports a record number of new purpose-built rentals in 2024: 5500 units. Then compare that to 3216 units in 2023, and 3606 units in 2022 (the previous record year). https://www.avisonyoung.ca/w/2024-sees-record-amount-of-new-purpose-built-residential-rental-units-added-to-the-market-in-calgary.
Then we look at the Greater Downtown Plan for the City of Calgary, created in 2021, https://www.calgary.ca/planning/community/greater-downtown-plan.html?redirect=/greaterdowntown. Calgary’s office vacancy rate peaked near 34% in 2021!! Some bold thinkers decided it was time to try something new. The City of Calgary created a program to partially fund office conversions to rental homes. For this data, please see the recent Calgary Herald article written by Hiren Mansukhani, on March 13, 2025. In the first round of the plan, 13 conversion projects were approved, using $153 million of city funds (payable to the developer/contractor on completion). In the second round, $52.5 million in additional projects were approved, for a total of 17 projects. The first ambitious conversion was completed in 2024 for 112 suites. The second conversion is now leasing for 87 rental homes. And a third is due for opening in the summer of 2025, for 195 “premium” rental homes. Six more are due for completion in 2025 (stay tuned with tariffs, but I’m sure they’re trying!). Despite some of these projects having incredible complexity and difficulty, they continue to move forward. Now, Calgary’s office vacancy rate is down to 21.7% as of Q4, 2024, https://www.altusgroup.com/insights/canadian-office-market-update/?utm_source=google&utm_medium=organic. Impressive results of time and a creative solution!
Now for the real drama. Take a look at Alberta Major Projects, focused on Calgary, focused on residential. That is $2.8 Billion of residential public and private projects (includes only the buildings over $5 million). The list function, will show the projects under construction out to 2026, and a few proposed. May we add, this does not include mixed-use buildings, or all of those cute 8-unit buildings for the smaller real estate investors. That’s a lot of apartments coming soon!! https://majorprojects.alberta.ca/#list/?sector=Residential&municipality=Calgary&includeNoEstimates=1&type=Residential_Apartment:-High-Rise,Residential_Apartment:-Low-Rise,Residential_Apartment:-Mid-Rise,Residential_Community,Residential_Office-Conversion,Residential_Other-Residential,Residential_Townhouses.
What’s our key takeaways? With all these choices for tenants, we believe rental rates will continue to decline in Calgary. Suited homes, or full detached homes for rent will continue to have value (hint: dog owners and families with kids), but will face competition and may need some upgrades. We are planning our proformas with an abundance of caution regarding rental rates.
