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This article was published 11/1/2016 (1411 days ago), so information in it may no longer be current.
Vimal Kumar does not intend to move to Winnipeg, but that didn't stop the Michigan IT specialist from buying a condominium in one of city's the most talked-about downtown projects — the proposed 45-storey SkyCity Centre tower on Graham Avenue.
Kumar is one of a growing number of out-of-province investors who are snapping up condos in Winnipeg with the intention of either renting them out or keeping them for a short time before reselling them.
A recent rental-market survey by Canada Mortgage and Housing Corp. found a surprising 2.7 per cent of the condos in Winnipeg are owned by foreign investors. That's a big increase from a year ago, when only 0.1 per cent were foreign-owned.
It also puts Winnipeg up there with Vancouver and Toronto, which have foreign-ownership rates for condos of 3.5 per cent and 3.3 per cent respectively.
The CMHC survey didn't delve into who the foreign buyers are or why they've taken a sudden liking to Winnipeg. Felicia Mutheardy, a senior economist with the agency, said those are some of the questions the corporation hopes to answer with its 2016 fall survey.
Royal LePage Dynamic Real Estate's Susan Joshi, who is the exclusive selling agent for the 388-unit SkyCity project, said roughly 25 to 30 per cent of the 136 SkyCity condos that have sold so far were purchased by investors who plan to rent them out.
She couldn't say how many of them are out-of-province investors. They include lawyers, doctors and other professionals from countries such as the United States, China and Saudi Arabia.
She said the tower's developer, Fortress Real Developments, also hopes to sell 40 of the condos to investors in the Toronto area. She noted the goal is to pre-sell at least 200 of the tower's units, which will enable the project to proceed.
She said she's not sure why more foreign investors have taken an interest in Winnipeg's condo market.
She assumes it's because they see it as a more affordable, less risky alternative to higher-priced — and some would argue over-heated — markets such as Toronto and Vancouver.
Peter Squire, residential market analyst for the Winnipeg Realtors Association, said some may already own rental condos in those cities and are looking to diversify their portfolio.
He said they may also be attracted by the combination of rising property values and low apartment vacancy rates in Winnipeg.
Kumar said it was all of those things, plus a strong U.S. dollar and the ongoing revitalization of downtown Winnipeg, that convinced him to buy here rather than in Toronto.
He's also convinced the on-site amenities the SkyCity tower will offer — such as a grocery store, a bank branch and a gym — will make it easy to find a tenant for his 529-square-foot, one-bedroom unit.
Kumar, who visited Winnipeg one day last fall to select his unit, said the two main complaints he heard about the city were the cold winters and the crime rate.
"But I also read Winnipeg has 300-plus days of sunshine. And with the crime rate, I figure that probably with time and more investment coming in, that will probably take care of it," he added.
While the SkyCity project is catching the eye of foreign investors, it's by no means the only one. Stuart Berenhaut, another Royal Le Page Dynamic agent, said his sales team has sold 15 to 20 condos in south Winnipeg over the last two years to foreign investors.
Most have been Chinese investors who have children attending the University of Manitoba and needed a place for them to live, Berenhaut said.
He said some have since sold their units because their children have graduated. Others decided to retain them as rental properties.
Shane Li, a Singapore native who is attending the University of Manitoba, is one of the Chinese investors who has purchased a number of condos in Winnipeg in the last few years. Two of them were in Fort Richmond, and two are in the SkyCity tower.
Li said although he plans to return to China in a couple of years, he will likely hang on to all four condos as rental properties.
Know of any newsworthy or interesting trends or developments in the local office, retail or industrial real estate sectors? Let real estate reporter Murray McNeill know at the email address below, or at 204-697-7254.
Updated on Monday, January 11, 2016 at 7:50 AM CST: Photo changed.
11:16 AM: Corrects spelling of Berenhaut.