The housing market in Winnipeg and throughout Manitoba is healthy, but it could be better.
New-home construction in the past few years has been happening at record rates, but will definitely cool down a bit this year -- it almost has to in order to catch up with demand.
Similarly, all reports from the Manitoba and Winnipeg realtors' associations indicate that demand is still far exceeding supply and we remain a seller's market. Winnipeg has less than half of the listings per capita that both Saskatoon and Calgary enjoy. Demand is especially high in certain neighbourhoods where you seemingly have only to mention that you're thinking of selling your house to have lineups forming to place an offer on it.
Winnipeggers are famous for clinging to familiar neighbourhoods, generally where they were born and raised. Perhaps it's a resistance to change; perhaps it's just a certain level of comfort.
For the person with the means to live where they want, it's the price of choice. However, numerous other factors may negatively impact the most vulnerable homebuyer; the first-time buyer.
Generally, but not always, the first-time buyer is younger and just getting started in the working world. Single or married, they may have been renting for a few years or just living with their parents while they saved enough money for a down-payment. This is where the problems start.
Canada Mortgage and Housing guidelines require that a homebuyer must have five per cent of the total selling price for a down-payment in order to qualify for a mortgage. Although this may be true on paper, there are numerous reported examples of first-time homebuyers who cannot get mortgage loans even when they have the necessary down-payment and can demonstrating that they are able to make their monthly payments. In many cases, their financial institutions want more than five per cent.
Other initial costs can also impede the first-time home buyer. Manitoba's Land Transfer Tax has long been a thorn in the side of the Winnipeg realtors. Originally designed to be revenue-neutral, covering just the administrative costs of changing a property title, this tax now averages more than $3,000 per home sale.
We need to create incentives to encourage Manitobans to stay in Manitoba, rather than throw impediments in their way and perhaps lose them to another city or province. We need to combine our resources to assist the first-time homebuyer, not discourage them.
Mike Moore is the president of the Manitoba Home Builders' Association.