In the spring, Sunnyside was littered with for sale signs. I was hoping speculators would get what they deserved. Unfortunately it looks like they are scooping up more housing units in the hopes that the boom times come again real soon.

The last 5 years have been great year for speculators and bad for renters. The price of housing increased 83% from 2004 to 2007.The vacancy rate in 2006 in Calgary was only 0.5%. Rental units were being condo-ized, which significantly decreased the supply of rental units. By the end of 2007 rents had increased 35% in just two years. Calgary now has the second highest rental rates in Canada at $1,106 per month for a two bedroom apartment, just lower than Vancouver ($1,154).

The housing market peaked in 2007. With the economic crash last fall, the price of housing decreased. Headlines made it seem like the market went off a cliff. In reality as of August 2009, housing prices were only 15% below what they were in August 2007. When put into perspective though, this is peanuts compared to the 83% gain. Now the price of housing is increasing again.

With all the condos built, in addition to those that were converted, there is a glut in the condo market. Unable to sell, 40% of condos are now being rented out. With this the vacancy rate has increased to 4%. This is deceiving though because condos are generally rented out for above the average rent, therefore there has been little effect on rents at the lower end of the scale. 

Rents though have seemed to stabilize which is much welcomed. The days of getting the eviction notice due to a condo conversion or the 50% to 100% rent increase seems to be behind us.

Others hope not. Headlines are now saying that housing is more affordable, so get in while it is cheap. I am not sure whether to cry or to laugh when I read this.

The median price of a single family home in August of 2009 was up 1% year over year, increasing to $400,000. This would mean that a household would have a combined income of $133,000 a year to realistically be able to afford a home. Add to this that interest rates are expected to significantly increase in the years to come, the cost of a mortgage is going to be even higher.

Even condos are expensive still. The median price of a condo decreased 3% to $268,500, year over year (not much of a glut), in August of 2009. A combined income of $89,500 per year would be necessary to afford the median condo, but this does not include condo fees (from $200 to $500 a month on top of your mortgage). Or that fact that the condo used to be a $700 per month rental unit quickly and cheaply renovated, the one your friends were evicted from, the one that the owner made so much money from that he doesn’t work and drives a Hummer.  

There are sold signs everywhere I look down our street. With the stock market increasing and economists saying the recession is over seems to have given speculators a green light to make another killing. Speculators, like psychopaths, have no concern for their victims. Driven by easy profits, speculators have had a devastating impact on renters. 

With no rent control, little investment in affordable housing, no inclusionary zoning policies, and weak renter rights, it could be a bumpy road for renters if the ‘good times’ return. Let’s hope not.