Winnipeg’s rental market tightens up

Finding affordable rental units in Winnipeg is difficult when compared to the rest of Canada, according to a recent market survey by the Canadian Housing and Mortgage Corporation (CMHC).

Data released by the CMHC in December shows Winnipeg has a vacancy rate of 1.1 per cent, the fifth lowest of the 35 Canadian metropolitan areas included in the survey. The 2011 mark is a slight improvement over the 0.8 per cent vacancy rate posted in 2010, but is still lower than traditionally tight rental markets such as Vancouver and the Greater Toronto Area — the vacancy rate is 1.4 per cent for both.

“It’s a combination of factors that over the last few years have led to this situation where we are facing extremely low vacancies,” said Dianne Himbeault, a senior market analyst at CMHC.

“We’ve seen an influx of population come into the province [ . . . ] and we haven’t seen a lot of growth in the amount of units available.”

In addition to low vacancy rates, Winnipeg has seen a rise in average rent prices in recent years that has far outstripped the maximum allowed rent increases set by the province.

Last year the provincial rent-control guideline was 1.5 per cent, yet the average rent in Winnipeg increased by 4.6 per cent. Landlords can exceed provincial guidelines through various exceptions, such as rising maintenance costs and repairs on rental properties.

According to Avrom Charach, vice president of Kay Four Properties Inc., rent controls have created unfavourable conditions for landlords and property developers who would rather convert rental units to condominiums than face restrictive regulation. That translates to less availability and higher prices for Winnipeg renters.

“[Landlords] protect themselves and they do what they have to do to protect their business,” Charach said. “What keeps the prices low at Safeway, Walmart and other places? Competition. There is no competition out there right now because we are all full.”

Charach added that when competition for rental units is high, landlords can be very selective when it comes to choosing new tenants.

“That doesn’t help renters because a minor blemish or someone without a rental history or a credit history that might be entering university will have a hard time finding a suite.”

Students, who often lack rental experience and are relatively short term tenants, are often passed over in a tight rental market for tenants that are perceived as more desirable, Charach commented.

Himbeault agreed that a lack of experience is a disadvantage for students seeking a rental unit, also pointing to the high demand for moderately priced units.

“Students are usually looking for more affordable accommodations,” said Himbeault. “There is that sweet spot where a unit is fairly decent and the rent is average or below average, [but] the vacancy rate is, for all intents and purposes, zero. So it’s very difficult to find something in that range.”

Elianna Rosenthal, a University One student from out of the province, said she had no trouble finding accommodation in student housing but she understands the challenges university students face off-campus.

“I feel like if you’re a college student and you are trying to live off-campus or close to campus, you are going to run into some problems,” Rosenthal said. “I think it is going to be like that all over, I don’t think it’s because we’re in Winnipeg.”

1 Comment on "Winnipeg’s rental market tightens up"

  1. Good old rent control keeping prices high and vacancy low

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