Many Winnipeggers are opting for homeownership with incentives from the Federal Government
Winnipeg’s unemployment rate as of February 2022 sits at 5.7 percent, which is just slightly higher than the national rate of 5.3 percent. According to Stats Canada, the employment growth rate continues to outpace population growth as the labour market tightens across the country.
Although the city saw the addition of 15,000 jobs as first reported by the Census Metropolitan Area (CMA), labour markets conditions are only starting to recover to pre-pandemic levels. Despite the record low employment rates, rental demands are weaker than in previous years. Several factors are said to contribute to lower demand for landlord-based housing.
First, the pandemic saw the need for housing, where the vast majority of the population shifted to remote work. With the increased demand for housing, Winnipeggers opted to buy instead of renting with so much uncertainty surrounding the pandemic.
Second, immigration in the province was up 82% on a year-over-year basis. Even with such an increase, the immigrant population spent more time living with family members or work sponsors rather than renting.
In Winnipeg, there was an increase of 2,915 units in 2021, the largest annual increase on record based on data dating back to 1990. “Additions to rental supply will likely continue to be elevated going forward as apartment units under construction were up 30% year-over-year as of October 2021. Among units in the purpose-built rental market completed between July 2018 and June 2021, the average rent was $1,541 or 33% higher than the average rent for all units.” Said, CMA
With the average rent being on par with a mortgage, first-time homebuyers are taking advantage of many of the programs put in place by the Federal government to incentivize homeownership. With the start of Spring, we are already seeing a red hot housing market with several listings going well above asking. And if that trend continues, the decreased demand for rental property can follow suit.