Rental market options slimmer in city, CMHC reports

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This article was published 27/01/2023 (975 days ago), so information in it may no longer be current.

Options in Winnipeg’s rental market are slimmer due to increased demand and a lack of supply, a new Canadian Mortgage and Housing Corporation report found.

Winnipeg’s purpose-built rental vacancy rate nearly halved in 2022, when compared to 2021 — 2.7 per cent from 5.1 per cent.

It comes after two years of growing vacancies.

“The growth in rental demand is way stronger than the actual supply into the market,” said Adebola Omosola, a senior analyst with the CMHC.

Across Canada, the purpose-built rental vacancy rate reached its lowest level since 2001 — 1.9 per cent.

In Winnipeg, the core — like Fort Rouge and Centennial — had the biggest drop in vacancy. Suburban areas including Transcona and Fort Garry also saw “significant declines.”

A number of factors have led to the tightening in Winnipeg’s market, according to the CMHC. First, there’s been improvements in provincial economic conditions.

Manitoba’s unemployment rate was 4.6 per cent last October. In July, it set a record low of 3.5 per cent.

International immigrants have flowed in as pandemic-era restrictions lift.

“Once you have more people living within the city, especially international migrants… that drives up demand,” Omosola noted.

She pointed to rising borrowing costs as another contributor. On Wednesday, the Bank of Canada raised its key interest rate to 4.5 per cent.

It’s stopped potential home buyers from inking a deal, Omosola said.

Meantime, the average rental price has increased — though at its slowest pace since 1999, according to the CMHC.

Winnipeg apartments were, on average, 1.7 per cent more expensive last October than October 2021.

A typical two-bedroom cost $1,350, up 1.5 per cent from the prior year, the report stated. Monthly rent was $1,301 for the condo apartment market.

Rentals.ca’s latest data show a typical two-bedroom apartment In Winnipeg cost $1,602 last December.

Still, rent has been “relatively stable,” Omosola noted.

It’s likely because of the provincial government’s freeze on rent increases, which it implemented in both 2022 and 2023, she said.

Still, some landlords were able to raise their rents between five and 126 per cent last year due to Residential Tenancies Branch approvals, the Free Press reported.

For Winnipeg’s lowest earners, affordable options make up just four per cent of the rental market.

“Those in the most critical need will continue to lose viable options for long-term housing developments,” said Steph Bisson, End Homelessness Winnipeg’s communications and community relations manager.

The CMHC grouped people earning $27,000 or less into Winnipeg’s lowest income quintile. Bachelor and one-bedroom suites account for most of the units considered affordable for the group, the report found.

“A family of four or five won’t fit in a bachelor,” Bisson noted.

Winnipeg needs to increase its stock of affordable suites with three or more bedrooms, he added.

The CMHC rental report, which comes out annually, focuses on commercial rental builds, not subsidized housing.

People signing for a rental space began paying, on average, 5.2 per cent more than current tenants of the same Winnipeg site in 2022, the report found. In 2021, that difference was one per cent.

Even so, the increase isn’t “too large” when comparing Winnipeg to larger metros like Vancouver, Omosola said.

“Winnipeg is one of the few CMAs (census metropolitan areas) that fall on the slower growth rate in average rent (this) past year,” she said.

The CMHC expects the number of Winnipeg rental units up for grabs to increase. In 2022, 85 per cent of Winnipeg apartments under construction were flagged for rental.

For Yijia Qu, rent is too expensive in general.

“I just (need to) find a roommate so we can rent a two bedroom,” the graduate student said.

The cost of a two bedroom is quite similar to a one bedroom, she added. She’s balancing university and work. Though she receives money from parents, it’s not enough for the “very high” rents at many places.

“It seems like if you don’t have the right salary… you have to get something that’s in the more dangerous areas of the city,” said Kayla Wesa, a University of Winnipeg student.

“If you want to get something anywhere that’s safer, it’s a lot more expensive.”

gabrielle.piche@winnipegfreepress.com