Calgary rents soared last year at the fastest pace in nearly two decades, while the vacancy rate hit lows not seen since 2014, according to Canada Mortgage and Housing Corp.’s (CMHC) annual rental market report.
Those conditions were driven by the province’s major population gains, says the report published Wednesday.
Affordable options are a particularly scarce commodity — the vacancy rate for less expensive rental units in Calgary is below one per cent.
The average Calgary rent for a two-bedroom purpose-built apartment rose 14 per cent to $1,695 while sporting a 1.4 per cent vacancy rate. The city’s condo apartment market is even tighter, posting a one per cent vacancy rate and $1,819 average monthly rent.
Calgary’s vacancy rate is now on par with Toronto, which was 1.5 per cent when the assessment finished in October 2023. The national vacancy rate is also at 1.5 per cent.
“We are moving toward a place where Calgary can soon be comparable to Toronto or Vancouver,” said Anupam Das, professor of economics at Mount Royal University. “Clearly something is happening in Alberta.”
Vancouver’s vacancy rate is 0.8 per cent for two-bedroom apartments.
Low-income renters in Calgary have some of the fewest options, the new data show.
The lowest rent quartile for two-bedroom apartments has a vacancy rate of just 0.9 per cent. This is combined with landlords providing fewer incentives to tenants, such as a free month’s rent or deals on certain amenities, Das said.
He added that all levels of government need to increase rental supply so Alberta’s newcomers can move into livable conditions when they arrive.
Edmonton’s rental market also rapidly constricted in 2023: While its 2.4 per cent vacancy rate is still well above the national average, that number was at 4.3 per cent a year earlier.
And the northern Alberta city could face looming supply challenges, CMHC’s report said. The agency’s housing supply report from last year said housing starts dropped about 30 per cent in the first half of 2023 compared to the same period in 2022.
Edmonton’s vacancy rate is expected to drop further over the next few years, said Taylor Pardy, CMHC economist and senior specialist for Alberta and the Prairies.
Parry said CMHC expects vacancy in Edmonton to hit 1.4 per cent in 2024 and 1.3 per cent the following year.
“If you’re getting above three per cent, then you’re doing pretty well,” Pardy said.
Calgary’s rental market has about 9,000 rental units in the pipeline that should become available in the coming years, he added. But as Alberta’s record migration blew past CMHC’s vacancy projections going into 2023, the new builds have done little to prevent rent hikes.
Calgary’s increasingly expensive housing market mixed with a high-interest-rate environment are also keeping more people in the rental market, Das said.
“For many people, it’s simply not possible to borrow that much money at such a high interest rate, so they went to the rental market,” Das said.
“It’s partly because of the demand-supply mismatch that was caused by interprovincial and international migration here. But at the same time, we did not have enough affordable housing in place in this province.”
Calgary’s vacancy rates aren’t expected to improve in 2024, CMHC’s Pardy said, though potential recessionary conditions would make it harder to predict the rental market’s trajectory.
CMHC is re-evaluating its vacancy projections for Calgary, which it initially predicted would hit 1.4 per cent in 2024 and 1.2 per cent in 2025.
“I don’t think our sentiment has changed in the sense that we continue to think that the market is going to remain fairly tight,” Pardy said.
The next year will likely be “unpredictable,” Das said, but he’s not optimistic the city will see an instantaneous improvement.
“We are kind of on the edge . . . there are hardly any vacant places available. We are in a very tight situation right now.
“I hope that it does not get any worse.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
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Yuri Kageyama is on X:
The Canadian Press. All rights reserved.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
Companies in this story: (TSX:SHOP)
The Canadian Press. All rights reserved.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
Companies in this story: (TSX:REI.UN)
The Canadian Press. All rights reserved.
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