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“We are seeing a lot of conversions from condominium developments to purpose-built rental,” he says.
While overall starts in Edmonton remained relatively flat for Q2, 2020, compared with Q1, purpose-built rental starts increased 13 per cent.
All the new product coming to market is likely a big driver behind a slight drop in the average price of rent per square foot, falling from $1.68 in Q2 last year to $1.64 for the same quarter in 2020.
That’s partly a factor of occupancy rates falling from 91 per cent in Q2, 2019, to 86 per cent in Q2 this year, in turn, due to more new rental product coming to market.
Cornelius adds this trend is not new. Edmonton’s new condominium segment has struggled for several quarters, so developers have been converting many projects to purpose-built rentals.
He adds growth in rentals, as well as higher demand for lower cost ownership options, should remain strong as long as the pandemic and the energy slump weigh on the economy.
Cornelius further points to unemployment being problematic. In the second quarter, the jobless rate was more than 15 per cent, double the figure the year before for the same period. That’s driven by the pandemic’s impact and continuing troubles in the energy sector.
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