City’s boring housing market has upside

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This article was published 14/01/2019 (2544 days ago), so information in it may no longer be current.

The year-end numbers for the 2018 housing market are out; by all accounts, the Winnipeg real estate market continues to perform in an organized, boring manner.

But when it comes to the real estate market, for those in the midst of it — homeowners and buyers — boring is good.

Late last week, both Winnipeg Realtors Association and Royal LePage came out with the tabulated numbers. Not surprisingly, both blamed slightly lower sales volumes on the implementation early in the year of federally mandated stress-test thresholds that were designed primarily to tamp down skyrocketing prices in Toronto and Vancouver.

Winnipeg house prices in 2018 were up slightly. According to Winnipeg Realtors, the average residential-detached or single-family home sale price in 2018 was $321,945, a very modest increase of two per cent over 2017.

According to Royal LePage house price survey data, the aggregate price of a home in Winnipeg was up 3.1 per cent.

If there is any segment that’s lagging, it’s the condominium market. It took about two weeks longer to sell a condo than a residential detached home in 2018, said Winnipeg Realtors.

Royal LePage said prices fell by 5.8 per cent.

While their numbers differ slightly, both Peter Squire, market analyst with Winnipeg Realtors Association, and Liz Taylor, a Winnipeg Royal LePage sales representative/associate broker, agreed that the Winnipeg market kept chugging along, only down slightly from 10-year averages.

Homes took only about one day longer to sell, on average, than it took them to sell in 2017, a near-record year.

“We are slow and steady,” Taylor said. “It’s not sexy, but it is the truth.”

The total sales volume of 12,773 was down five per cent from 2017, and six per cent from the best year on record, 2016. That was one per cent off the 10-year average, but the market was dealing with the aftermath of five interest-rate hikes and a second stress-test imposition.

So all things considered, it was a pretty good year.

“Last year, the main difference was some buyers just weren’t able to buy the house they wanted given the new rules and higher rates. They decided to sit on the sidelines in 2018 and regroup and figure out what they were going to do,” Squire said.

The Office of Financial Institutions (OSFI) rule that took effect Jan. 1, 2018, requires mortgage applicants to show they can afford mortgage payments that are two percentage points higher than the rate they have negotiated with their mortgage providers.

That followed the stress test from the fall of 2016 that was only imposed on insured mortgages — those where the buyer was putting down less than 20 per cent of the purchase price. But starting in 2018, all homebuyers had to show the same financial capacity, and that meant some people were not able to buy the house they wanted. Some decided that if they couldn’t buy the home they wanted, they were prepared to wait.

“I believe it was a factor, especially in some of the higher-priced areas,” Taylor said. “It is infinitely frustrating because they (OSFI) came in and did the sweeping stress test meant to cool the markets in Toronto and Vancouver. It worked for them. But real estate is so local and we were not seeing the same issues as those big markets were. It cooled us a little, too.”

According to the Royal LePage report, Winnipeg’s average house price in 2018 was $305,763 including two-storey, bungalows and condominiums. (This, according to its data, was an increase of 3.1 per cent from last year.)

While Winnipeggers might bemoan the fact that house prices aren’t increasing by double digits like they were in 2006 and 2007, the average price here is in excess of 50 per cent lower than the national average, which Royal LePage pegs at $631,223.

“We are not in a bad place,” Squire said. “Affordable housing is good. It is an advantage to our housing market. Affordability is one of our strengths.”

martin.cash@freepress.mb.ca