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Winnipeg Free Press - PRINT EDITION

Housing prices still climbing

Further hikes expected this year

By: Martin Cash and Murray McNeill

Posted: 01/8/2010 1:00 AM | Comments: 0 (including replies)

Momentum from double-digit housing price increases for the last three months of the year is expected to fuel further price hikes in 2010, according to the latest Royal Lepage market survey forecast.

The national real estate firm said condominiums led the Winnipeg price-hike parade in the fourth quarter, with a year-over-year average-price increase of 15.7 per cent.

That was followed by standard two-storey homes, which were up 10 per cent, and standard bungalows, up 9.9 per cent.

Prices for condos in the northwest part of the city had the largest year-over-year increase -- up 23.4 per cent -- followed by a 22.5-per-cent increase in two-storey homes in Westwood and 15.2-per-cent increase in Charleswood condos.

The last three months of the year were preceded by some weak sales volumes and weak price increases.

But by October the number of home sales were only off by 14 from the year before and prices were up 10 per cent.

In November, sales volume shot up 27 per cent and prices were up by about 10.5 per cent, followed by another 20-per-cent increase in sales in December with prices up a solid 16 per cent.

"Put that all in the blender and it was a really strong fourth quarter for Winnipeg," said John Froese, broker and owner of Royal Lepage Prime Real Estate.

The increases pushed the average selling price for a standard bungalow to $241,650 in Winnipeg, $275,500 for a standard two-storey home and $153,929 for a standard condo.

While 10 per cent annual price increases are now expected in Winnipeg, Froese pointed out that we still have the lowest home prices west of Montreal.

"Saskatchewan prices used to be lower, but they are way past us now," he said.

Royal Lepage is forecasting average home prices in Winnipeg in 2010 at $223,200, compared to $265,000 in Regina.

Low interest rates, which helped fuel demand, and a limited supply of available homes were cited as the two key contributors to the strong price gains.

Froese said there continues to be a lack of quality homes on the market in Winnipeg.

"Supply and demand drives prices up and the supply side was lacking this past year," he said. "It really shows when it comes to quality. If you have a half-decent house you'll be able to get a really good buck for it."

That is expected to be the trend for next year as well.

Royal Lepage is predicting another year of healthy price gains for 2010 in Winnipeg, with an overall average increase of eight per cent expected -- the largest increase by far forecasted for the nine largest cities in the country. For instance, the firm is calling for average prices in Edmonton to increase by only 1.5 per cent and only three per cent in Calgary.

Froese said the stable provincial economy, which does not seem to face any obvious roadblocks, has helped consumer confidence grow.

The report said the upward pressure on house prices here is part of a national trend that began in the last half of 2009.

"The Canadian real estate market enters 2010 with considerable momentum from an unusually strong finish to the previous year," said Phil Soper, president and CEO of Royal Le Page Real Estate Services. "The stimulus effect of low borrowing costs has contributed to a sharp rise in demand that has driven activity levels to new highs."

The company predicts the demand for homes will remain strong through the first half of the year, but prices should moderate in the second half as the supply of available homes improves and interest rates begin to rise.

martin.cash@freepress.mb.ca murray.mcneill@freepress.mb.ca

Homes selling for more in city

Here is a comparison of the average selling price in the fourth quarter of 2009 for the three most popular types of homes in Winnipeg, and the percentage change from a year earlier:

Area Bungalow 2-storey Condo

Price % change Price % change Price % change

Charleswood $242,000 +11.7 $276,000 +6.2 $152,000 +15.2

River Heights $234,200 +15.4 $283,000 -0.7 $148,000 +7.2

Southdale $236,700 +9.8 $234,000 +4.9 N/A N/A

Westwood $228,500 +8.8 $280,000 +22.5 $139,000 +6.9

North West $238,000 +7.2 $285,000 +8.0 $176,500 +23.4

North East $244,000 +11.9 $280,000 +12.7 $129,000 +14.7

South St. Vital $248,800 N/A $286,000 N/A $173,000 N/A

Ft. Richmond $261,000 +2.8 $280,000 +14.4 $160,000 +11.9

-- Source: Royal LePage Real Estate Services

Republished from the Winnipeg Free Press print edition January 8, 2010 B3

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