It is encouraging to hear good news about another side of the real estate market that has been clearly underrepresented. To put it mildly, new apartment construction has been scarce in Winnipeg.
Because the vacancy rate is hovering around one per cent, a number of potential renters have no option but to purchase an existing home. This puts more pressure on the resale market and creates affordability issues and bidding wars, placing many homes beyond the reach of modest-income first-time buyers.
The Winnipeg Real Estate Board, as much as it has been pleased with increased home sales and the fact vendors are receiving top dollar for their properties, has for some time been calling for a balanced market with more rental units to provide Winnipeggers with greater housing options.
The recent construction of 103 apartment units in St. Vital may be a sign of a new trend — investors willing to build more new apartment units in Winnipeg.
Does this mean some of the changes the Manitoba Government has made to its rent control regime — a version, albeit a restricted one, of
voluntary vacancy leave which allows the landlord to be exempt from the rent control guidelines for a vacated unit — are stimulating more construction and improvements on existing units?
Other provinces such as Ontario and British Columbia have gone this route and are seeing greater reinvestment in existing and new rental units.
The voluntary vacancy decontrol program was introduced in Ontario in the late 1990s. At the time, Toronto’s vacancy rate was just under one per cent. By the end of 2004, it went up to 4.3 per cent.
Manitoba has to do a lot of catching up. Not only has Winnipeg experienced modest new unit construction over the years, but there has actually been an overall loss of apartment units due to apartment condominium conversions and buildings being condemned.
While NHL hockey hasn’t returned to Winnipeg, past and present NHLers Doug Gilmour and Valeri Bure have shown their willingness to invest in the city. CanWest Global Interactive Inc. reported that deal-maker Grant Skinner said the hockey stars are comfortable putting money into apartments in Winnipeg. They view the apartment complex as a stable investment in a market where there is a scarcity of good apartment units.
Now, I wonder if the rent includes a free subscription to the NHL Shaw cable package.
15 NHLers involved
CanWest reported that a group of 15 current and former National Hockey League players have chosen a just-completed apartment building in Winnipeg as their first real estate investment together.
The $12-million investment in the 103-unit Kenwood Court in St. Vital was made in late August. Doug Gilmour, retired captain of the Toronto Maple Leafs, and Todd Simpson, an 11-year NHL veteran who finished last season with the Montreal Canadiens, cut the ribbon on the new block.
Also on hand was their agent, Grant Skinner, president of Wellington West Pro Ice Management and the man who brought the deal together.
Skinner said the Winnipeg market has stable growth and the players felt comfortable putting their money in his own backyard, reported CanWest.
“Our players can invest anywhere in the world and (they) have. They have options in their lives and they come from all over the world. They’ve made the decision Winnipeg is a good place to invest their money for the long term,” he told CanWest.
“We believe real estate should be a core holding as part of their long-term wealth management strategy.”
For Gilmour, it’s the second investment in the Manitoba capital. He is a partner with Kevin McFadden, a local benefits and pension consultant, in Toronto-based mortgage brokerage MonsterMortgage.ca, which opened a Winnipeg office last spring.
“Real estate is something I’ve been dabbling in for a long time. It happens when you play for seven teams,” McFadden told CanWest.
Simpson, who is still unsigned for the coming hockey season, told CanWest: “There’s a real lack of apartment units in Winnipeg. It seemed like a great fit to partner up and invest in a project.”
CanWest reported that the first phase of tenants moved into the building yesterday and the second phase will get their keys in October.