Rental expense and vacancy rates are rising in Winnipeg.
While that may seem like cause for concern, The Canadian Mortgage and Housing Corporation (CMHC) attributes the rise to the COVID-19 pandemic.
The CMHC says lower immigration rates, fewer student renters, and a weakened economy have contributed to the increase in vacancy.
One simple explanation? High supply and low demand.
Financial constraints are forcing renters who work in the service and hospitality industries to abandon their apartments—with some opting to move home or into shared living spaces. Others are content to renew their leases and wait out the pandemic.
While service and hospitality are on hold, construction has continued mostly unfettered, so rental spaces are opening up every day across the city. This new construction could be inflating the vacancy rates.
And this rise is not unique to Winnipeg.
Across the country, more rental properties remained empty over 2020. Regina, Edmonton, Calgary, and Saskatoon are all experiencing increased vacancy—among this list, Winnipeg has the lowest vacancy rate.
The average price of rent is also up nationally, and Winnipeg is no exception; our city saw an increase of 3 per cent over 2020.
The CMHC suggests prices are up nationally because rental growth was strong before the pandemic. There are no certainties in the COVID-era, but this could indicate a healthy return post-pandemic.
Despite early fears COVID-19 would leave renters destitute and desperate, the CMHC reported nearly half of Canada’s apartment owners maintained arrear rates similar to— or lower than—2019.
There is always risk involved with buying a rental property, and although the pandemic has changed the market, it has not necessarily increased that risk.
Like the CMHC report, market data is a valuable tool for real estate investors to determine when and where to spend their money.
Keen investors can capitalize on opportunities by identifying and mitigating risks.
By Tyler Searle