Winnipeg Free Press - PRINT EDITION

City house prices rise despite national slowdown

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HOMEBUYERS and builders tapped the brakes last month, but a hefty hike in second-quarter selling prices shows there's still a lot of get up and go in the Winnipeg housing market, industry officials say.

While some observers said Tuesday the Canadian market has reached a tipping point -- CIBC economist Emanuella Enanajor said slowing mortgage and consumer debt accumulation indicates Canadian house prices may dip 10 per cent over the next year or so -- others said that won't be the case here.

Spokespeople for Canada Mortgage and Housing Corp. and Royal LePage Real Estate Services said they still expect the average selling price for a resale home to rise by about five per cent this year in Winnipeg.

"I think that overall, we just have a strong economy and things are going good," said John Froese, a broker with Royal LePage Prime Real Estate in Winnipeg. "There's very little bad news for Manitoba."

The results of Royal LePage's latest national house prices survey, issued Tuesday, seem to back that up. They showed a strong demand for condominiums and bungalows kept average selling prices climbing between 4.7 and 9.2 per cent during the April-to-June period, depending on the type of home. That compared to national average price gains of between 3.3 and 5.5 per cent.

Froese said one potential bump in the road could be tighter federal mortgage-lending rules that came into effect on Monday. Those changes, which reduce the maximum amortization period to 25 years from 30 and the equity borrowing limit to 80 per cent from 85 per cent, might force some first-time homebuyers to delay their purchases.

"But they're still going to be buying. They'll just have to wait a little longer," he said. "So it's going to slow things down a little bit. Not a lot, but a little bit."

Dianne Himbeault, Canada Mortgage and Housing Corp.'s senior market analyst for Manitoba, also foresees a strong second half for both the new and resale homes markets here.

Although June housing-start numbers Tuesday showed a 37 per cent drop in single-family housing starts in the Winnipeg Census Metropolitan Area, Himbeault said that was likely just builders taking a breather after a 50-per-cent surge in single-family starts in May.

"That was probably a pace that was a little hard to maintain," she said.

June Multiple Listing Service numbers released Friday also showed a two per cent decline last month in sales of existing homes in Winnipeg. But WinnipegRealtors president Shirley Przybyl said it was more a pause in the action, rather than the beginning of a slowdown.

Froese and Himbeault agreed the demand for homes, new and existing, remains strong.

"Despite last month's reduction, new home construction remains on pace to finish the year above 2011 levels," Himbeault said.

Nationally, Royal LePage said prices for all types of housing generally went up in Canada in the second quarter, and will likely rise further in areas such as Toronto and Winnipeg.

But Q2 price declines in some other cities suggest homes there have likely become too expensive for buyers at the current levels, it said.

"Confidence in Canada's real estate market is sound, but home prices cannot grow faster than salaries and the underlying economy indefinitely," said Royal Le Page president Phil Soper.

murray.mcneill@freepress.mb.ca

-- with files from The Canadian Press

 

How Winnipeg stacks up

Average home selling price (percentage increase over 2011 Q2 in brackets):

 

Condominium Detached bungalow Two-storey

Winnipeg $190,857 (9.2%) $304,250 (8.2%) $321,875 (4.7%)

Canada $245,825 (3.3%) $376,311 (5.5%) $408,423 (4.7%)

 

-- source: Royal LePage's second-quarter national house prices survey

Manitoba starts

down in June

Here is what Canada Mortgage and Housing Corp. said about Manitoba's June housing starts:

 

-- Single-family starts plunged by 37 per cent to 129 units from 205 in June 2011.

-- Multi-family starts, which include condos, apartments, semi-detached units and row housing, more than doubled to 101 units from 40 a year earlier.

-- Combined starts were down by 6.1 per cent to 230 units from 245.

-- Combined starts for the first six months of 2012 were up by 39.8 per cent to 1,922 units from 1,375 in the same period last year.

-- Single starts were up by 6.9 per cent to 945 units from 884.

-- Multi-family starts soared by 99 per cent to 977 units from 491.

Republished from the Winnipeg Free Press print edition July 11, 2012 B5

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