Movin' on up

Enlarge Image

kaz bednarczyk / winnipeg free press Arden, Catherine and their two-year-old daughter are moving from their tiny, two-bedroom starter house to a much roomier four-bedroom home.

Arden and Catherine are movin' on up, thanks in part to skyrocketing property values in Winnipeg over the last 10 years.

A new Re/Max report released Thursday shows the average house price in Winnipeg increased by a staggering 160 per cent between 2002 and 2012, climbing to $255,058 from $98,054.

That was the third-fastest growth rate among the 16 Canadian cities examined in the Re/Max Move-Up Buyers Report. Only Regina and Saskatoon saw bigger gains, at 198.9 per cent and 165.4 per cent respectively.

Re/Max also did a price-growth comparison for the last five years, where Winnipeg scored even higher -- second only to Regina with growth of 49.6 per cent versus Regina's 81.8 per cent.

By comparison, the national average growth rate was 93.3 per cent for the 10-year period, and 18.4 per cent for the last five years.

That kind of eye-popping growth, coupled with historically low interest rates, has given local homeowners like Arden and Catherine the financial clout to upgrade to a bigger and/or better home. And in many cases, in half the time it used to take.

Re/Max said the period between moves for Winnipeg move-up buyers has dropped to four to five years from five to 10 years in the late 1990s or early 2000s.

"And part of the reason is that they've been able to build up their equity very quickly," said Cliff King, of Re/Max Executive Realty in Winnipeg.

In the case of Arden and Catherine (who did not want their last names used), they recently sold their 750-square-foot, two-bedroom, St. Vital bungalow they purchased six years ago for a nice profit. The couple saw a 69 per cent increase in value in the time they owned their home.

The couple then used the equity from the sale of their first home to buy a 1,900-square-foot, four-bedroom home in Crescentwood.

"We did really well selling our (first) house," Arden said in an interview. "And when we bought our (next) house we got a great deal."

Now they and their growing family -- they have one child and another on the way -- will have the extra room they need when they take possession of their new digs next month.

King said Arden, who is a graphic design teacher, and Catherine, who is medical resident, are prime examples of the kind of move-up buyers who have helped keep the Winnipeg housing market percolating over the last 10 years.

He said first-time buyers are still the main driving force because "they're the ones that allow the move-up buyers to make that move."

But its the move-up buyers who keep the ball rolling, he added, as demonstrated by a 15 per cent increase last year in the number of transactions in the popular move-up price range point of $300,000 to $450,000.

And while house prices are rising at a slower pace now -- 5.7 per cent last year versus the double-digit gains of a few years ago -- King said the demand for homes remains strong.

Re/Max noted last month was the second best January on record for house sales through the local Multiple Listing Service.

"With a stable job market and a low unemployment rate in Winnipeg, buyers are keen on upsizing or relocating to better neighbourhoods," it said, "secure that homeownership in the city represents a solid investment now and in the future."

Peter Squire, residential market analyst for the Winnipeg Realtors Association, said he's not surprised that Winnipeg, Regina and Saskatoon racked up the biggest percentage gains because they had some of the cheapest house prices back in 2002.

"It's going to be those markets that were at the lower end of the spectrum that will see the biggest gains," he said. "But having said that, we know that Winnipeg has been performing exceptionally well. Especially given how tight our market has been."

He said Winnipeg has been one of the tightest housing markets in the country for much of the past decade, with the number of buyers far outnumbering the number of homes for sale.

But that short supply also helped to fuel the rapid rise in prices, he added, by triggering bidding wars for many sought-after properties.

murray.mcneill@freepress.mb.ca

Residential average price and compound annual growth rate (CAGR) by market (2002 - 2012):

MARKET20022012 INCREASE (%) CAGR (%)

Greater Vancouver $301,473 $730,063 142.17 9.25

Victoria $242,503 $484,164 99.65 7.16

Kelowna $204,838 $400,027 95.29 6.92

Calgary $198,350 $412,315 107.87 7.59

Edmonton $150,165 $334,318 122.63 8.33

Regina $100,751 $301,145 198.90 11.57

Saskatoon $118,999 $315,834 165.41 10.25

Winnipeg $98,054 $255,058 160.12 10.03

Ottawa $200,711 $352,610 75.68 5.80

Greater Toronto Area $275,231 $497,298 80.68 6.09

Hamilton-Burlington $183,442 $360,059 96.28 6.98

Kitchener-Waterloo $177,559 $312,419 75.95 5.81

London-St. Thomas $142,745 $241,160 68.94 5.38

Halifax-Dartmouth $148,737 $270,742 82.03 6.17

Saint John $103,544 $168,048 62.30 4.96

St. John's $114,626 $285,529 149.10 9.56

Canada$188,164 $363,740 93.31 6.81

-- Sources: Canadian Real Estate Board, Toronto Real Estate Board, Okanagan Mainline Real Estate Board, Re/Max

Republished from the Winnipeg Free Press print edition February 22, 2013 B5