A balcony is delivered to a multi-family construction project in the North Flats on Thursday afternoon. City planning officials expect such projects to outpace single-family home building by "10 to one" in 2025 as rising rents and demand in the city make projects attractive.--News Photo Collin Gallant
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Medicine Hat lags behind only Calgary in terms of rental increases in Alberta cities over the last three years, according to newly released national data, though that may slow as a large number of new units could be built over the next 18 months.
Apartment rents in Medicine Hat rose by 27 per cent over three years, according to the Canadian Mortgage and Housing Corporation. Its annual rental market report to October 2024 states a 9.5 per cent increase in Medicine Hat last year brought the average apartment rent in the city to $1,183.
That near-$300 per month increase since the fall of 2021 is relatively higher than every other large and mid-sized Alberta city with a sizeable rental market, with one exception.
The Hat is only outpaced in terms of percentage increase over the same by Calgary over that same time.
There, average rent increases actually slowed last year, but still pushed the average apartment rent to $1,732 per month. That’s a cumulative 29.6 per cent higher over three years, while rents in Edmonton, Lethbridge, Grande Prairie, Red Deer and even Fort McMurray were more stable.
The federal agency’s study highlights what local renters have been saying for several years: that prices are rising fast and, with low vacancy, there are few options.
Higher rents and built-up demand could be fuelling a high level of interest and projects already underway, said John Popoff, the city’s manager of building, planning and business services.
“We’re encouraged by the trend that has been a high level of interest in multi-unit development,” said Popoff. “In 2024, we had just 100 units, mainly apartments, that received development and building permits, and an additional 200 units have gone through the development permit stage, but are (awaiting) building permits.
“It’s looking like at least 10 multi-family units for every single family unit in terms of development activity, and we’re seeing a lot of inquires … there’s definitely a demand and interest from developers looking for opportunities to build. That’s great, and hopefully they’ll be accommodated.”
Last year, developers keyed in on multiple-unit buildings deemed more affordable or entry level units. As well, duplex permits tripled in 2024 to 18, while a single large apartment project – the first in the city in five years – is connected to 100 rental units alone.
Another 100-plus unit project, at Southview Drive and Dunmore Road, is in the late development permit stage.
Adding as many as 300 units cumulatively would increase the number of private apartment units (about 2,600) in the city by more than 10 per cent after years of stagnant growth.
The overall vacancy rate in Medicine Hat actually grew slightly to a still-low 2.3 per cent over the last 12 months.
Rental rates rise
The annual report from the CMHC comprises data from October to October of each year and is released in early January.
The latest edition states the average bachelor apartment rent in Medicine Hat rose above $1,000 for the first time in 2024, to $1,062, up from $900 one year earlier.
That 16 per cent rise marks the largest increase specific to unit-type.
One-bedroom suites rose 11.3 per cent to $1,114, two bedrooms to $1,201 (up 8.8 per cent) and three bedrooms to $1,432 (6.3 per cent).
Medicine Hat’s 2024 increase of 9.5 per cent was the third highest among major cities in Alberta behind Grande Prairie (10.4 per cent to $1,261) and Red Deer (up 10.2 per cent to $1,271)
Rents in Lethbridge featured a 0.5 per cent vacancy rate, with a 5.4 per cent increase bringing the average unit’s estimated rent to $1,517.
Rents in Brooks rose 17.3 per cent last year, to $1,326 on average, or almost 50 per cent higher than the $900 average four years ago.
