Winnipeg Free Press
February 23, 2000
CMHC expects city’s apartment vacancy rate to sit around 3 per
By Murray McNeill
Winnipeg’s apartment vacancy rate is expected to continue hovering around three per cent – it’s lowest point since 1987 – for most of this year, the test Canada Mortgage and Housing Corp. rental market forecast projects.
After falling from six per cent in 1996 to a 12-year low of three per cent last October, the city's overall apartment vacancy rate is expected to stabilize this year at around 2.9 or three per cent, CMHC's senior market analyst for Manitoba told a breakfast meeting yesterday in Winnipeg.
David Stansen said although there continues to be downward pressure on vacancy rates, that will be offset by a spurt of new rental units coming onto the market.
Stansen noted there were 304 new rental unit housing starts in Winnipeg last year and it will likely be four or five months before they are absorbed into the marketplace. As well, CMHC expects about the same number of new rental-unit starts this year, he added, although most new construction likely won't begin until the second half of the year.
He said the new units should largely offset the downward pressures being created by escalating mortgage rates and rising house prices, which make houses less affordable and prevent some tenants from buying homes and vacating their apartments.
While the survey shows Winnipeg's overall vacancy rate is now at its lowest level since October 1987, when it stood at 2.8 per cent, at the neighbourhood level, rates range from as high as 10 per cent in some inner-city areas such as Lord Selkirk to as low as 0.7 per cent in Fort Garry.
The fact the rate is as high as 10 per cent in some inner-city areas prompted an official with one local landlords' group to question CMHC's description of the Winnipeg rental scene as a "balanced market."
Robert Shaer, president of the Professional Property Managers Association, said using that kind of terminology could leave people with the impression that supply and demand are balanced throughout the city, and clearly that's not the case in most inner-city areas, he added.
Shaer said that misconception could hurt the landlords' chances of convincing Manitoba Consumer and Corporate Affairs Minister Ron Lemieux that provincial rent-control guidelines need to be phased out or eliminated entirely.
The PPMA and the Apartment Investors Association of Manitoba Inc., a non-profit group representing small landlords, have been lobbying the NDP government to either phase out rent controls or at least peg them to inflation.
They argue that with the annual rent increase held to just one per cent since 1993, there has been no financial incentive for landlords to upgrade their properties or for developers to build new rental units.
Shaer noted all the new rental units built in the city last year were for the @plus and life-lease markets, not general rental properties, and he predicted there won't be any new properties built for the general market as long as rent controls remain in place.
Although PPMA officials are hoping the province will revamp its rent-control program, Lemieux said yesterday it likely will he the beginning of May before the government makes a decision.
He said in an interview that while he's aware of the financial challenges landlords face, he's also received numerous letters from seniors, students and low-income earners who say they can't afford a sharp increase in rent, which they fear will happen if rent controls are lifted.
"So there has to be a real balancing act for me personally as the minister."