Avison Young reports that the strong net migration, continued job growth and a declining supply of rental units in Edmonton all contributed to the reduction seen in vacancy rates at the close of 2012. In the Edmonton census metropolitan area (CMA), this led to a decline in the overall vacancy rate, which averaged 1.7 per cent, down from 3.3 per cent at the close of 2011.

According to the Canada Mortgage and Housing Corp. (CMHC), this marks the third consecutive year in which declining apartment vacancy rates were seen in the capital region. The most significant decline in vacancy was reported in three-bedroom rental units, which recorded a drop of 2.3 per cent year-over-year bringing the average overall vacancy rate to 1.1 per cent. Both two-bedroom and bachelor units followed with a 1.4 per cent vacancy rate. One-bedroom units reported the highest vacancy rate at two per cent.

Decreasing vacancy rates across the Edmonton CMA has led to upward pressure on average rents. On a same sample basis, rents have increased an average of 0.9 per cent year-over-year. This trend has led to fewer landlords offering incentives as a means of luring new tenants or reducing turnover. At present, an average of 3.8 per cent of landlords are still offering tenant incentives. This represents a 6.2 per cent drop year-over-year and brings incentives to the lowest level since 2008.

Looking ahead, upward trends in rental rates are expected to continue as vacancy remains low throughout Edmonton.