Holding steady

Hey there, time traveller!
This article was published 04/05/2020 (2125 days ago), so information in it may no longer be current.

The COVID-19 shutdown has put a damper on just about every single commercial market imaginable. Residential real estate is no exception.

So who would have expected that the highest-priced condo sale in the history of Winnipeg would have taken place in the middle of a frozen economy.

Say what you will about the glacial slow pace of Winnipeg housing price growth, it is nothing if not reliable and not even a global pandemic will change that.

Yes, new Winnipeg property listings were way down in April — more than 40 per cent — and many homeowners are concerned about the value of their homes holding up. The kind of pervasive consumer uncertainty now present is never good for any kind of market.

But wait a minute. The April housing market produced some results that should soothe some of those worries, like the sale of the most expensive condo in Winnipeg in the prestigious One Wellington Crescent building.

The price — $1.79 million.

David De Leeuw, a veteran agent at Royal Lepage Prime Real Estate, was the selling agent. The property was in play for some time and when the seller was ready to move there was plenty of uncertainty as to what the proper approach to marketing it would be.

“We decided to list it in April at the full price and see what would happen,” said De Leeuw.

He didn’t need to list it on the MLS because he and some peers already had five qualified buyers lined up, including a couple from Toronto.

But the Toronto buyers had conditions on selling their own Toronto condo worth about twice as much as the Winnipeg residence. They were not confident that they could get their price out of the Toronto market.

In the end, it sold for the asking price to Winnipeg buyers.

“I think it bodes well for the Winnipeg market,” De Leeuw said.

“I have been talking to my clients over the course of the last several weeks and there is lots of worrying with the loss of jobs and… people who own houses are worried that the value of their homes will drop along with their investments and everything else.”

“I think it bodes well for the Winnipeg market.”– Royal Lepage agent David De Leeuw said, referring to the sale of a $1.79-million condo. 

But there are good signs that’s not happening in Winnipeg. De Leeuw believes the Winnipeg market will be good coming out of the crisis.

Peter Squire, Winnipeg Realtors Association’s vice-president of external relations, said that it is true that April is the start of the busiest quarter in the housing market and while traffic is obviously down, prices are holding firm.

Squire said he has a rule of thumb for prices that compares the difference in the percentage gain or loss between sales and dollar volume. “For single family homes the difference is negligible — 0.16 per cent. This tells me right away there is no real change in pricing to be concerned about,” he said.

While listings in April were down by more than 40 per cent, sales were off by about 30 per cent.

Michael Froese, the managing partner for Royal Lepage Prime Real Estate in Winnipeg, said the decline in listings — or inventory — has even created some mini-bidding wars in the middle of this shutdown.

“Conventional wisdom would have said that in a pandemic everything comes to a screeching halt. But there are still a lot of buyers out there who need to buy,” he said. “The buyers didn’t leave in droves but the listings did. We have not seen a cliff drop in prices. In some parts of the city they have even shot up in competition.”

In its House Price Survey and Market Survey Forecast that came out at the beginning of April Royal Lepage said that if the virus was contained by the second quarter the aggregate price of a home in Winnipeg would be unchanged.

“However, if the impact of COVID-19 is felt till the end of summer, Canadians in the region could see the aggregate price of a home drop by two per cent (in Winnipeg),” it said.

Prior to the outbreak the fundamentals of the Winnipeg residential real estate market were strong.

Froese said the announcement the first phase of the reopening in Manitoba will start next week is obviously good news for the market.

“Predictions are tough at the moment but prices are holding,” he said. “If the phases of reopening roll out well, there is no reason to think there will be a price reduction this year.”

martin.cash@freepress.mb.ca