Alberta is proving to be a very popular place these days. At the end of 2022, the province boasted the highest net interprovincial migration of any Canadian province, adding just over 160,000 people last year. In the fourth quarter alone, there were 29,680 international migrants and 11,534 interprovincial migrants to Alberta, leading to an increase in population of 41,214 from Oct. 1 to Dec. 31, 2022.
Since the war in Ukraine began in February 2022, Alberta has received more than 26,000 Ukrainian newcomers, and thousands more are expected. Several thousand Afghan refugees have also settled in Alberta since the summer of 2021.
It was a year of massive growth for the entire country. In 2022, Statistics Canada reports that Canada added more than one million people to its population for the first time in history. International migration accounted for 95.9% of the total number. Canada leads all of the G7 countries with a population growth of 2.7%, and ranks among the top 20 countries in the world for population increase last year. If these numbers were to continue, the population of Canada could potentially double in the next 26 years.
Home rental market getting the squeeze
With interest-rate increases and a lack of affordable options, home ownership has dropped to a 30-year low in Canada. An influx of people is putting pressure on the rental property market, and landlords are the only ones benefitting.
According to recent figures from the Canada Mortgage and Housing Corporation (CMHC), Alberta’s rental property vacancy rate in October 2022 was at a mere 4.3%, down from 6.1% in 2021. Despite both Calgary and Edmonton having numerous rental-specific buildings completed or under construction since the 1990s, vacancy rates dropped to, respectively, 2.7% (the lowest Calgary has seen since 2014), and 4.3% in Edmonton (down from 7.3% last year).
A recent report by RBC reveals how the availability of rental stock is playing a part in rent increases. Calgary had the largest rate of increase of purpose-built rental stock last year at +7.2%, followed by Ottawa-Gatineau (+5.5%). The smallest rate of increases were in Toronto (+2.1%) and Montreal (+1.4%). Overall, rental stock across the country has increased 2.4%, the fastest pace of growth since 2014, but it is still not enough to keep up with population growth.
Those occupying purpose-built two-bedroom rental properties in Canada saw their rents rise an average of 5.6%, with Gatineau (+9.1%), Toronto (+6.5%) and Calgary (+6.0%) among the cities with the highest increases. RBC estimates there is already a 25,000- to 30,000-unit deficit in Canada’s purpose-built rental stock, which will only get worse over the next four years – potentially even quadrupling.
Vacancies in the condo market, where private investors purchase units for rental, are even tighter, says RBC, registering at 0.7% in Ottawa-Gatineau, 1.1% in Toronto and 1.8% in Calgary.
If you rent, you need tenant insurance
Landlords are required by law to carry insurance covering their building(s), contents they own that remain on the property, the property itself, the land, and liability for ownership of the land. The policy should also include coverage for loss of rental income. Landlord insurance is also often called rental property insurance, and landlords should always stipulate in their lease that their tenants are required to carry their own insurance.
Tenant insurance provides essential protections for people who do not own the homes they live in. It covers:
- The possessions you keep at your rental property. Be sure to create a comprehensive home inventory detailing everything you own and what you paid for it, and keep the list updated. TA home inventory is very useful should you ever have to file a claim, and helps you know exactly how much coverage you need.
- Damage to the property by weather, a catastrophic incident, or human error.
- Supplemental living expenses if the need for emergency repairs to the property force your temporary relocation.
- Liability in the case someone is injured at your rental property.
Don’t forget that high-value possessions such as jewelry, art, antiques, sports equipment, or collectibles, are often subject to special limits of coverage. For example, the special limit for jewelry is typically quite low, at around $5,000. Since jewelry collections are frequently worth significantly more than $5,000, this is one of the first limits you’ll want to check on your tenant insurance policy. Special limits for sports equipment is also often too low.
For the rest of your belongings, polices we recommend as experienced insurance brokers guarantee their full replacement cost without deduction for depreciation, up to the limits you select. We do not recommend actual cash value policies, which factor in depreciation. That means you will not be compensated the full amount it would take to replace lost possessions.
Thankfully, what with soaring rental rates, tenant insurance tends to be very affordable, particularly if your building or house is equipped with enhanced security and safety features.
Trust Lane’s for all of your Alberta insurance needs
The friendly, knowledgeable insurance experts at Lane’s are happy to discuss your tenant insurance options and help you choose the right policy for your unique needs. As insurance brokers, we have access to the very best policies offered by Canada’s top insurance providers, allowing us to do your insurance shopping for you. In addition, we offer value-added service and outstanding claims support.
As long as Lane’s is your insurance brokerage, you’ll know your broker, and more importantly, we’ll know you. Contact us at our Calgary, Edmonton, Banff, or greater Alberta offices to see what we can do for you.
