More and more new homes sitting vacant in some areas

by Ryan Smith23 Nov 2015
Even as supply can’t keep up with demand in booming markets like Toronto and Vancouver, some areas are finding more and more homes standing vacant and unsold.

A recent report by ATB Financial shows that new homes that haven’t been sold or rented has skyrocketed in Alberta suburbs.

In Edomonton, the number of unabsorbed homes has spiked by 30% in the past year, according to the report. Calgary hasn’t seen quite that number, but its unsold and unrented homes still spiked by 5%.

Calgary is in slightly better shape, and continues to see a demand for new homes because of its higher-paying jobs, according to a CBC News report. Currently there are 403 unabsorbed homes in the city, and that number is falling. In Edmonton, however, that number is 949 and rising, CBC reported.

And some ATB economists believe that economic conditions in the province will swell the number of completed but unabsorbed homes, according to the CBC. And Calgary is already in the depths of a vacancy crisis as the oil slump drives businesses out of office properties.

In Calgary, office vacancies have jumped to 14%, the highest level since 2010, and there may be as many as 2 million square feet of so-called “shadow vacancy” – space leased but sitting empty – which could push the rate to 16%.

COMMENTS

  • by Kosta Baltov 11/29/2015 3:34:27 PM

    The article forgets to analyze the rent itself. In Toronto, the Rent Control Board restrict the landlords of raising the rent beyond certain percentage which can be argued that it is set too low. The longer the tenant stays in a rental property, over time, the rent gets cheaper for the tenant which is why they don't want to move to another property. If they do, they'll have to pay a current market rate and because of that they (rightfully) stay put. If this reality is taken into account, may be, after all, our rent is undervalued. Something to think about.

  • by Robin Telfer 11/30/2015 1:50:07 PM

    For too long, this province was riding on an economic high. Over the years, Calgary went from an affordable city to one that became very expensive. The cost of food, entertainment and restaurants, recreation facilities, parking increased dramatically. This was based partly on the rising values of Real Estate. During our economic slowdown, the market place still hasn't adjusted to levels established 10 years ago. The latest forecasts are saying that the price of oil will not rebound for another 4 years. Let's hope that within that extended time frame, day to day living costs adjust accordingly and our Real Estate prices reflect a market value that many Albertans' can afford to support.

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