Home prices rise with demand

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This article was published 12/10/2017 (2953 days ago), so information in it may no longer be current.

Strong demand and a shrinking inventory of available homes drove up the aggregate price of a home in Winnipeg by more than five per cent in the third quarter of this year, according to a new report from Royal LePage.

In its latest quarterly House Price Survey report released on Thursday, the real estate firm said Winnipeg’s aggregate selling price increased by a healthy 5.5 per cent to $305,413 between the third quarter of last year and the third quarter of this year.

That’s the biggest year-over-year quarterly increase in at least two years, said Michael Froese, managing partner of Royal LePage Prime Realty in Winnipeg.

The report tracks the price changes for the three most popular types of homes — standard bungalow, standard two-storey and standard condominium. The ones that saw the biggest year-over-year price gains were two-storey houses and condos. The median price for both jumped by 6.1 per cent, to $333,145 and $249,856, respectively. Bungalows saw a more modest 4.7 per cent increase to $287,487.

“Increased demand from a growing population and a healthy economy has resulted in low inventory and price appreciation in all surveyed housing types,” Froese said. “Buyers are coming home to Winnipeg. Those who had left for employment in Calgary continue to return and we are seeing an increasing number of buyers from Toronto who don’t want to carry a large mortgage. Winnipeg is an affordable place to live and a good place to have a career.”

He said price gains “should remain resilient” through the remainder of the year, although he expects sales to dampen because of compounding external factors such as a potential enhanced mortgage stress test and proposed federal tax changes that affect small businesses.

“In addition to regulation directly aimed at the real estate market, buyers have had to budget two interest rate increases and the looming possibility of a further enhanced stress test. Also, uncertainty caused by the proposed federal tax changes will continue to affect sales as small business owners and their staff wait to see the outcome.”

The Royal LePage report notes some of the key economic indicators, including economic growth, housing starts, retail sales and provincial exports paint a mixed picture of the state of the provincial economy.

But “despite a mixed picture from other indicators, the housing sector is proving unambiguously strong,” it said.

Nationally, Royal LePage said the price of a home in Canada increased 13.3 per cent year-over-year to $628,411 in the third quarter. When broken out by housing type, the median price of a standard two-storey house rose 13.9 per cent to $748,049, the median price of a bungalow grew 9.5 per cent to $525,781 and the median price of a condo rose 15.2 per cent to $413,670.

The latest New Housing Price Index report released on Thursday by Statistics Canada also shows resale homes aren’t the only thing increasing in price in Winnipeg. The price of a new home was also up 3.6 per cent, on a year-over-year basis in August, and by 0.3 per cent from July to August.

murray.mcneill@freepress.mb.ca