Winnipeg Free Press
May 10, 2001
CMHC says vacancy rate falling
By Murray McNeill
WINNIPEG'S apartment vacancy rate will remain extremely tight for at least
another 18 months, Canada Mortgage and Housing Corp. warns in its latest
housing forecast.
The federal Crown corporation predicted yesterday in its latest outlook that
Winnipeg's overall vacancy rate will drop to 1.5 per cent this year from last
fall's
rate of 2.0 per cent and remain at that level for the remainder of this year and
all
of next year.
David Stansen, CMHC's senior market analyst for Manitoba, told a breakfast
gathering of local government, financial services and housing industry
representatives that a combination of factors is contributing to Winnipeg's
unusually low apartment vacancy rate. They include a total absence of any new
apartment construction, a growing population and a high employment rate in
Manitoba.
Stansen said although CMHC officials expect about 250 new multiple-family
housing units to be built this year in Winnipeg, none of them are expected to be
rental units. They'll all be condominiums and life-lease units aimed at the age
55-plus segment of the market, he added.
Rental property owners and managers have been quick to blame provincial
rent-control guidelines for the lack of new apartment construction. They argue
the
rent increase allowed under the guidelines -- it's 1.5 per cent this year and
was
one per cent for each of the seven years before that -- doesn't keep pace with
inflation and discourages landlords from building any new units.
While Stansen agreed that rent controls have been a disincentive to new
construction, he said its unfair to pin all the blame on them. He noted Alberta
doesn't have rent controls, yet the apartment vacancy rates in Calgary and
Edmonton are even lower than in Winnipeg.
Stansen said he and local property owners and managers have been discussing
the issue with provincial government officials and the province is now reviewing
its
rent-control program to see what impact it's having on new construction
activity.
He noted that most major Canadian cities are facing a similar problem -- low
vacancy rates and little or no new construction. He blamed it largely on
investors
sinking their money into other types of investments which they think will give
them a better return.
"To me, I think that's the key," he added.