By Liam Verster

Rental Market

Rental rates in Grande Prairie climb, despite nation-wide decline

Jun 17, 2020 | 2:02 PM

While Canada saw the average rental rates drop 1.4 per cent between April and May 2020, the Swan City saw an uptick in the rates for both one- and two-bedroom units, according to rentals.ca.

As the COVID-19 pandemic forced the closures of businesses and schools and shut-downs across the country, average rental prices saw a decrease. In Grande Prairie, the rates for one-bedroom units decreased from $1,047 in March, to $934 in April. Meanwhile, two-bedroom units saw a slight decrease from $1,221 to $1,201 in that same time period.

However, in May, the average rental price for a vacant one-bedroom unit rose to $950, and the average two-bedroom was going for $1,306.

The May rates for one-bedroom units were still nearly a $100 less than they were in January ($1,042) , though the two-bedroom units were going for more than they were at the beginning of the year ($1,214).

Paul Danison, the Content Director for rentals.ca, says there were a few factors that caused the initial drop in the Swan City, especially for the one-bedroom units.

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“There’s a couple things going on, and what could be happening in Grande Prairie is you’re getting fewer seasonal workers because the oil and gas situation. Thus fewer one-bedrooms are being rented. But that’s going to come back, I think it’s stalled, but that’s going to come back as oil prices do.

“Also, we’re seeing in the bigger cities, and I think in some of the smaller cities too like Grande Prairie, besides the fewer seasonal workers and the border closed and the fewer immigrants, you have a lot of college students that are living at home with their parents and taking online classes. Even graduates, unable to get a job, or recent graduates [who have been] laid off, coming back to live with their parents.”

Comparing the figures to the previous year, the rental rates for May 2020 were still lower than May 2019, when on average a one-bedroom unit was being rented for $1,052, and a two-bedroom was $1,262.

He adds that the spike in rent for the two-bedroom units, which Danison refers to as significant considering the downward trend seen most elsewhere, could have to do with the available units themselves. He says the average available two-bedroom in Grande Prairie may be on the higher-end, or fully furnished, which would drive the average rental rate back up. Other factors that may have caused the influx is the transition of short-term rentals to long-term, which tend to be more expensive, and people moving to Grande Prairie who have managed to keep their jobs, despite the shut-downs.

Danison also points to other, similar sized cities in Alberta, to understand how the markets compare.

“In Fort McMurray, it’s pretty close. Fort McMurray came in at about $1,000 for a one-bedroom, and $1,200 for a two-bedroom, so it’s definitely higher for a two-bedroom in Grande Prairie than in Fort McMurray .”

The rental rates in Lethbridge were lower, but Danison says that’s usually the case. What did stand out to him though, was the rental market in Red Deer for May.

“Red Deer’s been down quite a bit, out of 34 cities (on the rentals.ca rankings) it had the lowest rent for a one-bedroom and a two-bedroom. $892 for a one-bedroom, and $931 for a two-bedroom.”

He adds that Edmonton and Calgary, which both saw declines in the average one-bedroom rate, still have higher average rent than the rest of Alberta.

Danison adds the rental rates for Grande Prairie, and most of Alberta as well, will be seeing slow but steady increases throughout the summer, barring a second outbreak of COVID-19, as the province reopens and people go back to work.

Rentals.ca collects data on vacant rental units across Canada to determine the average rent on one- and two-bedroom units. Danison says the most recent data on the vacancy rate, which was 5.1 per cent for all of 2019, which was up from the previous year. Danison says he figures that rate has increased since those numbers were released in January, and it will be interesting to see what effects the coronavirus pandemic will have on the rental markets in both the short- and long-term.