Rising rent costs and limited options are making it challenging for Regina renters to find the right place to settle into.

The average two-bedroom rent in Regina rose 3.3 per cent to $1,186 in 2022, according to a rental market report released by Canada Mortgage and Housing Corporation (CMHC).

Monthly rent for a two-bedroom condo apartment was even higher, rising 14.7 per cent to $1,467, CMHC said.

“Landlords often increase rent to current market levels when a tenant leaves a unit. Some landlords upgrade units between tenants so they can charge higher rents to new tenants,” CMHC said in the report.

“These higher rents increased affordability challenges for renters who are trying to enter the market or find new housing.”

Falling vacancy rates are also contributing to rent increases, according to CMHC.

Regina’s rental vacancy rate dropped to 3.2 per cent in 2022, which is down from the five-year average of seven per cent and the lowest rate since 2014.

The national average dipped to 1.9 per cent in 2022.

The downtown, university, Lakeview and Albert Park areas have the lowest vacancy rates in the city, according to the report.

CMHC said demand outpaced supply in 2022 as last year saw some of the highest levels of migration into Saskatchewan.

Migration coupled with the economy’s return to pre-pandemic levels and an increase of in-person activities contributed to the rising occupancy rate of rental apartments.

According to CMHC senior market analyst Anita Linares, high inflation rates are also forcing more people out of the housing market and into the rental market.

“Some people may not be able to afford down payments, not able to afford mortgage payments and they are being pushed into the rental market,” Linares said.

“It’s kind of like a balloon. You squeeze one area and it pushes into another.”

According to CMHC, there were 191 additions to Regina’s rental supply. However, due to the demolition and renovation of older rental stock, the increased supply was not enough to meet demand in the fourth quarter of 2022.

“We’ve seen a decrease in the rental market universe for the second year in a row,” Linares said.

“It’s highlighting the need and awareness that there is a supply issue within Regina.”

Linares said this should be a signal for all levels of government to intervene and address the supply issues.

She said these rental market trends are likely to continue into 2023. However, as interest rates are expected to decrease by the end of the year, she said renters will hopefully see “an easing in the market.”