Vacancy rate on the rise in Regina, so why isn't the cost of rent going down?
Some residents struggle to afford rent in Regina despite oversupply
Jayleen Missens waitsoutside a downtown Regina apartment building with her son and a YWCA employee on a Thursday afternoon.
This is the third apartment she has viewed in her search for a place to live. She says that it's been hard, as most places prefer tenants without children, and her budget is tight.
She relies on social assistance and has only $711 she can spend on rent.
"I can't find a place outside of North Central, where I don't want to go back to because I'm a recovering meth addict, and I don't want to go back to where I would use a lot, and it's just hard for me right now," said Missens.
She says she would like to find a place downtown where she would have access to services like those offered at the YWCA.
Living on your own can make finding an affordable rental unit in the city a struggle.
Matthew Gagon finds Regina's rental market expensive. He says he needs a roommate to help split the cost of rent.
"That's pretty much the only way you can really get by," he said.
Average rent is up
According to the latest statistics from Canada Mortgage and Housing Corporation, the average monthly rent for a two-bedroom apartment in Regina was $1,130 in October 2018, compared to $1,116 in October 2017.
This is mainly due to an abundance of newly constructed rental units that tend to charge more than older units. Newly constructed units have outpaced demand for rent, nudging Regina's vacancy rate from 7 per cent to 7.7 per cent.
This elevated vacancy rate has pushed landlords and property managers of older units to lower their rents as they try to compete with new rentals.
The CMHC report breaks down what happens ifyou remove newly constructed buildings from the equation. If you compare the same units from 2017 to 2018 without newbuildings rent for a two-bedroom apartment declined by 0.5 per cent, according to the report.
Shawn Schlechter, owner of Shawn's Property Management, says he has never seen a vacancy rate this high in his 20 years in the business.
He says his main goal is to get tenants in the door. When a property owner tells him they need a $1,000 to cover their bottom line, he urges them to come down to $900 in order to stay competitive.
"It's just one of those things that you have to do. It's better to lose $100than it is to lose the whole $1,000," said Schlechter.
He says he and other landlords are in the red for their properties right now. Some of his homes have been sitting vacant for six months.
Schlechter predicts it will only get worse in the colder months as fewerpeople are looking to move.
Incentives instead
When looking to price properties, Trina Maguire, property manager with Charan Property Management, says it can be hard to convince an owner to take a loss on their property.
She says landlords are hesitant to lower rent to match the market, so insteadshe offers incentives to attract tenants.
Incentives range from a free month's rent to free internet for four months.
"I mean we're kind of hand-in-hand with like Calgary and Edmonton, and those are a lot bigger cities and I feel that [the Regina market] is a little bit top-heavy," she said.
Mayor predicts market correction
Mayor Michael Fougere said the City of Regina offers tax exemption programs and capital grants to encourage affordable housing and prevent homelessness.
When it comes tomarket rents, though, Fougere agrees prices arehigh in Regina.
"We have one of the fastest growing cities in Canada for international immigration and yet we still have an oversupply and rents are not going down," he said.
At the same time, it's not the role of the city to intervene, he said.
"You would think that rates would go down to try to drive people to take those units up, so there's got to be a market correction at some point."
The next CMHC report will be released later this fall.
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