Winnipeg's overall apartment vacancy rate has climbed to its highest level in more than a decade, providing much-needed relief for weary tenants who have been grappling with chronically low vacancy rates since the turn of the new century.
The Canada Mortgage and Housing Corporation's 2013 Fall Rental Market Survey report released Thursday shows the overall vacancy rate in the Winnipeg Census Metropolitan Area (CMA) has jumped nearly a full percentage point in the past year, climbing to 2.5 per cent in October from 1.7 per cent in October 2012.
And it's a similar story for Manitoba's overall urban vacancy rate, which is the average rate for the province's seven largest urban centres combined. It jumped to 2.4 per cent from 1.6 per cent, although in individual centres it ranges as low as 1.3 per cent in Winkler to as high as 3.2 per cent in Steinbach.
'It's no longer the situation where a landlord can pick from a list of 10 prospective tenants for a suite'
The last time Winnipeg and Manitoba had an overall vacancy rate higher than two per cent was 1999, when Winnipeg's was 3.0 per cent, said Dianne Himbeault, CMHC's senior market analyst for Winnipeg.
The following year it dropped to two per cent, and it kept on falling. It plummeted as low as 0.8 per cent in 2010 before slowly clawing its way back up as local developers began building more new rental units -- something that wasn't happening in the 1990s -- and historically low mortgage rates made buying a home a viable option for a growing number of younger renters.
A spokesman for the group representing landlords and property managers in the province -- the Professional Property Managers Association -- said while some landlords may not be happy about the higher vacancy rates, they're good for the city. "That (2.5 per cent) is actually approaching market equilibrium," Avrom Charach said, noting three per cent is considered full market equilibrium -- the point where tenants and landlords have equal bargaining power.
"It's no longer the situation where a landlord can pick from a list of 10 prospective tenants for a suite," he said. "Now its more one to one... which is a more appropriate situation for both."
The president of the University of Manitoba Students' Union (UMSU) said students will benefit from the improvement in the overall vacancy rate, although not as much as some might think.
Al Turnbull said the rates are likely still pretty low for more moderately priced apartments, and for suites in areas close to the U of M's south Fort Garry campus.
The CMHC survey results confirm the vacancy rates in Fort Garry and neighbouring St. Vital remain among the lowest in the city, at 1.6 per cent and 1.7 per cent respectively.
Himbeault also confirmed vacancy rates are highest in newer, more expensive rental units in the city -- the ones built since 2000. The vacancy rate there is 5.2 per cent, which is essentially unchanged from a year ago.
Charach said a 2.5 per cent overall vacancy rate shouldn't stop local developers from building more new units -- this is the fourth straight year rental starts have surpassed the 800-unit mark.
The head of a local firm building a new $70-million, 25-storey apartment block on downtown Assiniboine Avenue -- Crystal Developers Inc. -- said Crystal still plans to proceed next year with a new 153-unit apartment complex in southwest Winnipeg.
Rubin Spletzer said he remains confident they'll find tenants for the 234-unit Heritage Landing complex on Assiniboine when it opens in 2015.
"It's going to be a bit of a showcase," he said. "It will be a nice place to live... and I think it's an excellent location."
While the rise in vacancy rates is good news for renters, the bad news is rental rates also continue to climb. CMHC said the average monthly rental rate for a two-bedroom apartment in Winnipeg has risen by 4.8 per cent in the past year, to $969 from $911.
And for the province's seven largest urban centres combined, the increase is 4.6 per cent -- $937 versus $887.