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Starts decline, prices still rise

But growth pace slowing in city

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Single-family home construction underway in the Sage Creek development. Growth in this type of housing is only outpaced by condominiums.

WAYNE GLOWACKI / WINNIPEG FREE PRESS Enlarge Image

Single-family home construction underway in the Sage Creek development. Growth in this type of housing is only outpaced by condominiums. Photo Store

Housing starts in June in Winnipeg were down about 20 per cent compared with last June, but the city had one of its strongest months ever when it comes to the dollar value of house sales.

That's because prices have continued to go up.

But the Royal LePage House Price Survey and Market Survey Forecast for Winnipeg released Wednesday reported home prices are not charging ahead at the same pace as they have.

The Royal Lepage survey has detached bungalow prices in Winnipeg up two per cent year over year to an average of $311,015, but standard two-storey houses declined by 2.4 per cent to an average of $336,241.

The good news is condominiums saw a strong price increase, rising 5.3 per cent to an average price of $209,023 with condos in some areas of the city close to and well above double-digit price increases.

Rick Preston, broker and owner of Royal LePage Dynamic, said, "There was not as much price increase as prior years, and I would suggest that's because there's more inventory around to choose from. The frantic pace has dissipated a little but certainly it's still a good market."

The Winnipeg Realtors June MLS (multiple listing service) report, also out this week, showed new listings were 22 per cent higher in June than for the same month last year. There are 1,000 more MLS listings available going into July than was the case last year at this time.

The increase in resale inventory has also meant a lessening of new construction activity. While sales volumes continue to be strong, Canada Mortgage and Housing Corp. has reported June saw a sixth straight monthly decline in the total of single- and multi-family housing starts in the Winnipeg area.

Construction started on 342 units in June, down from 488 in May.

But Dianne Himbeault, CMHC's senior market analyst for Winnipeg, said, "The trend in total housing starts remained stable in June, with the pace of construction hovering between 3,500 and 4,000 units since the beginning of the year. While multi-family starts trended upward, single-detached construction has slowed so far in 2014 in response to increased competition from a well-supplied resale market."

Looking ahead to the remainder of 2014, Royal LePage forecasts home prices in Winnipeg will rise by approximately 2.8 per cent, which is better than Regina, but not as strong as the other Western Canadian cities and Toronto. Royal Lepage is forecasting an average price increase across the country of 5.1 per cent, fuelled by 8.1 per cent average increases in Toronto, 7.1 per cent in Vancouver and 5.5 per cent in Calgary.

Preston said while there might not be as many instances of bidding frenzy, he said the very good properties are still getting lots of interest and overall housing sales were strong in June. Winnipeg Realtors' June MLS tally of $416 million was the second-highest monthly total on record.

It was also the third-highest sales volume for the month of June at 1,515 units, up two per cent from last year.

Year-to-date sales are up slightly -- less than one per cent -- to 6,476 units and the year-to-date dollar volume increased around five per cent to $1.76 billion.

The condo market continues to exhibit good growth. Winnipeg Realtors reports for the first six months of the year, condo listings increased 33 per cent over 2013 and sales were up 11 per cent.

"That has been the story in the market in the last half-dozen years," Preston said. "Condos have been going up faster than single-family homes."

There are lots of contributing factors to that increased demand, including younger people preferring that alternative, higher single-family prices making condos a more affordable alternative and empty nesters looking to downsize.

"With the increase in demand, you got a greater selection, which has brought more people to the condo market both for starters and the move-up market," said Preston.

martin.cash@freepress.mb.ca

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

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