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Housing market chugs on

Hot December caps another solid year

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A construction worker cleans off the roof of a house being built in the Bridgewater Lakes development.

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Winnipeg's housing market roared across the finish line in 2013, posting one of the best Decembers on record for sales of existing homes and banging out a whopping 74 per cent increase in new housing starts.

Thursday was a big day for housing-related news in Winnipeg, with four new reports being released. Combined, they paint a picture of a housing market that continues to fire on all cylinders.

For example, the resale-homes side of the market set a new dollar-volume record for both December and 2013, according to the Winnipeg Realtors Association (WRA). And in terms of unit sales, it just missed surpassing the 13,000-unit plateau for the third straight year, thanks in part to the third-highest December sales total in the association's 110-year history.

"Unit sales (for the year) were down only one per cent (for the year), the dollar volume was up five per cent, and listings were up nine per cent," WRA president Richard Dettman said in an interview. "So it really was a good year for both buyers and sellers. We have what can be described as a healthy, balanced market."

Healthy is also a good word to describe the state of the new-homes segment of the Winnipeg market.

Not only did Winnipeg-area homebuilders register more new starts in 2013 than in the previous year -- 4,705 versus 4,065 -- it was the fourth straight year they've done that.

And last year's 15.3 per cent increase was three time bigger than what Canadian's leading housing forecaster -- Canada Mortgage and Housing Corp. (CMHC) -- was forecasting.

"A lot of that was on the strength of the (multi-family starts)," said Dianne Himbeault, CMHC's senior market analyst for Winnipeg. "We had a lot of multi-family projects this year."

Himbeault noted 2013 was the first year since 1979 there were more multi-family starts than single-family starts in the Winnipeg census metropolitan areas and in Manitoba's eight largest urban markets combined.

"At least 2,000 multi-family starts per year is the new Winnipeg norm, and we had over 2,400 last year," she noted.

She said all of that new multi-family construction activity is being driven by a strong demand for both new condos and new rental units, which include apartment-style units and row housing. There were almost 1,600 new condos started last year in the Winnipeg CMA -- a 54 per cent increase from 2012 -- and 808 new rental units.

Himbeault said last month's 522 per cent jump in multi-family starts was a reflection of the fact it was a particularly strong December for that kind of activity, and December of 2012 was a particularly weak one.

She admitted last month's strong showing was a bit surprising given the unusually harsh weather conditions -- it was the coldest December in more than a decade.

The rising popularity of condos was also one of the big stories for the city's resale-home market in 2013. The other was the nine per cent jump in listings.

"They (condos) were really the star performer in 2013," said Peter Squire, the WRA's residential market analyst.

He and Dettman said not only are condos a more affordable alternative for first-time home buyers than a single-detached home, they're an attractive option for baby boomers who want to downsize or are seeking to change in a lifestyle. "They're saying, 'I don't need this big family home. I'm going to look at something different,' " Squire added.

He said that trend may also partially explain why more homeowners put their homes up for sale in 2013.

Royal LePage's also cited last year's strong performance by condos in its 2014 Housing Price Survey report released on Thursday.

"The overall housing market (in Winnipeg) has remained relatively balanced with the exception of condos, which are currently seeing a surge in demand from two very different demographics," said Rick Preston, broker/owner of Royal LePage Dynamic Real Estate in Winnipeg. "On one end there are a growing number of young, single professionals using condos as their entry into the market. At the same time there are a group of baby boomers who want to downsize and see condos as an attractive option."

The Royal LePage report said condos also saw the biggest increase in average selling price in 2013 -- up 7.2 per cent to $205,976. Standard two-storey homes saw the second-biggest price gain, rising by two per cent to $329,104.

Detached bungalows were the only popular type of home that did not see an increase in the average selling price. It remained essentially unchanged at $303,760.

As for this year, Royal LePage forecasts a modest two per cent price appreciation in the Winnipeg housing market, and for unit sales to either hold steady or possibly decline by a modest 0.5 per cent.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition January 10, 2014 B6

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