Residential sales record

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This article was published 17/12/2020 (2095 days ago), so information in it may no longer be current.

It might not be the record expected to be smashed amid a global pandemic, but business has never looked better for the local real estate market.

For the first time, more than 15,000 residential properties have been sold in the province in a single year, the Manitoba Real Estate Association announced Wednesday. On top of that, forecasts this week from Royal LePage and WinnipegREALTORS show demand has been so significant in late 2020 that it’s driving home prices higher than ever before.

But while this may be good news for brokers and sellers, what about the buyers at large who must continue spending more money to purchase a home?

Industry experts told the Free Press that’s yet another cost stemming from COVID-19. And, they say, it might be a while before inflation rates will begin to normalize.

That means homebuyers can expect a whole lot of bidding wars, even more exorbitant fees, and fewer choices to pick from with shrinking inventory well into next year.

“It’s definitely become a cliché buzzword to say unprecedented,” said Peter Squire, vice-president of market intelligence at WinnipegREALTORS. “But I’m hard-pressed to find a better way to put it. The fact is, real estate has never been a hotter market — especially in our city.”

The aggregate price of a home in Canada is set to rise 5.5 per cent year-over-year to $746,100 in 2021, according to the Royal LePage Market Survey Forecast.

In Winnipeg, the median price of a two-storey detached home is expected to rise five per cent to $401,600, and the median price of a condominium is projected to increase by 1.25 per cent to $230,100.

Despite those rising prices, sales in November were up by more than 25 per cent compared to numbers from 2019, according to the real estate association. That’s the highest monthly total ever recorded within Manitoba.

“I mean, it’s not surprising when all you’re being told is to ‘stay home’ by governments and public health,” said Squire, who believes the value of home ownership has increased as a result of the messaging throughout the course of COVID-19.

“People are working from home and want to buy homes because they have an environment where that’s what you have to do to remain safe, not just right now, but economically for your future.”

 

Re/Max realtor Jennifer Queen said it’s also because of people moving from metropolitan areas like the Greater Toronto Area to the suburbs of Winnipeg.

“I handled many more relocations from the GTA this year than I normally would and most cited simply wanting more living space for themselves and their families,” she said. “Living in high-rises became much less attractive.”

Squire worries, however, about whether this “trend of success for the industry” will continue after pandemic restrictions have been lifted and a vaccine for the coronavirus is widely available.

“I suspect by late 2021, it might be a different story,” he said Wednesday. “I’m optimistic that we’ll match sales, but will it be the kind of unexpected growth the way we’ve seen this year? I’m not so sure.”

Executives from Royal LePage and the real estate association agree. They said the gradual lack of inventory and listings as a result of high demand will also be a problem in the future.

“While Manitoba’s housing market has been a bright spot in what has been a difficult year for many, lower levels of inventory on the market are proving to be a constraint,” said association president Glen Tosh, adding numbers show new listings are down by 8.4 per cent compared to last year.

Tosh cited strong buyer demand and fewer homes on the market, “combined with low interest rates which increases a buyer’s purchasing power,” has created a highly competitive local housing market.

“The inventory of properties for sale came nowhere near to meeting surging demand,” said Phil Soper, president and CEO of Royal LePage. “We do not see this imbalance improving in the new year and the upward pressure on home prices will continue.”

While 2019 was a record year with total year-to-date sales dollars of $4.27 billion, according to the real estate association, that was surpassed by over 13 per cent this year — up to around $4.81 billion in 2020 sales within Manitoba.

“We are fortunate in Manitoba that homes remain relatively affordable compared to other parts of the country,” said Tosh. “However, we’ll certainly be watching the market closely heading into the new year.

“As realtors, we want to see a housing market that is balanced and affordable. Having ample supply of homes available for purchase is a critical factor in ensuring affordability for buyers.”

Twitter: @temurdur

Temur.Durrani@freepress.mb.ca