Alberta Makes Progress in Inflation Fight, Aiding Rental Markets

Alberta Makes Progress in Inflation Fight, Aiding Rental Markets

After hitting alarming highs in 2022, Alberta made significant strides in getting inflation under control over the past year. While prices remained elevated, the province managed to rein in runaway inflation through aggressive interest rate hikes by the Bank of Canada.

Inflation in Alberta peaked at over 8% in the summer of 2022 before decelerating steadily throughout 2023. By November, Alberta's annual inflation rate had fallen to just 2.5%, down from 3.3% for the year-to-date period. While still above the Bank of Canada's 2% target, it marked substantial progress from the near double-digit levels of the previous year.

The national inflation picture showed similar improvement, with Canada's annual inflation rate cooling from a peak of over 8% in 2022 to 3.1% by November 2023, down from 3.9% year-to-date.

To get inflation under control, the Bank of Canada raised its benchmark interest rate to a 22-year high of 5% through an aggressive hiking cycle not seen since the early 1990s. The vast majority of the 4.75 percentage point increase occurred in 2022, with only 0.75 points of tightening added in 2023.

While more interest rate hikes can't be ruled out, the Bank signaled it believes the bulk of the inflation fighting is now behind us. Governor Tiff Macklem recently raised the possibility of getting inflation "close" to the 2% target by the end of 2024 through a cautious, data-dependent approach.

The significant progress on inflation in 2023 is good news for Alberta's booming rental housing market. With price pressures easing, prospective tenants will find soaring rental costs becoming more manageable. This, combined with Alberta's surging population growth, creates an ideal environment for multifamily landlords to raise rents while keeping occupancy levels extremely high. Investors can expect very strong returns in this asset class in the year ahead.

Alberta's economic resilience, with GDP growth of 2.7% forecasted for 2023 compared to just 1.2% nationally, also bodes well for the rental markets. With job growth continuing to outpace other provinces, rental demand shows no signs of letting up any time soon.

Exploring Alberta's Rental Market: A Webinar Opportunity

The strides made by Alberta in curbing inflation signal a positive trajectory for the rental housing market in the province. With rental costs becoming more manageable and population growth surging, there's a clear window of opportunity for investors in multifamily properties.

I'm thrilled to extend a personal invitation to you for an upcoming webinar that dives deeper into the real estate and private capital marketplace in Western Canada. Presented by Axcess Capital Advisors in partnership with Legacy Investment, this webinar promises to shed light on the dynamic landscape of Alberta's rental markets, providing insights into the factors driving demand and offering investment strategies.

Join me, Adrian C. Spitters, along with other industry experts, on Wednesday, April 3rd, 2024, from 4 PM to 5 PM MST (6 PM to 7 PM EST). Together, we'll explore Legacy Investment's property portfolio, growth strategies, and forthcoming acquisitions, providing valuable insights into the Western Canadian real estate market.

REGISTER HERE

Don't miss out on this chance to tap into Alberta's vibrant rental market!

Can't make the webinar, no worries! Register for our complimentary in-person Vancouver event on April 17th: REGISTER HERE

To learn more about the opportunities to invest in Alberta multifamily rental real estate, register above or contact me at aspitters@pfcwealthsolutions.com or use my Calendly Link.