City housing market breaks more records
Average home price up 16.3% over last year, while two-thirds sold above list in March
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Hey there, time traveller!
This article was published 19/04/2022 (225 days ago), so information in it may no longer be current.
Winnipeg housing prices jumped a record-breaking 16.3 per cent year-over-year.
According to a Royal LePage report released Tuesday, it’s the biggest increase the real estate company has recorded since it began tracking aggregate prices.
“These records keep on going,” said Michael Froese, a managing broker for Royal LePage Prime Real Estate in Winnipeg.
For the first time ever, an average single-family detached home costs over $400,000 — a median $425,600 — in the city. In 2021’s first quarter, the same house type had an average price tag of $382,000.
The average Winnipeg condo rose from $225,000 in quarter one last year to a current $243,900, an 8.4 per cent increase.
“We didn’t expect (buying) to be as intense as it was in the first quarter,” Froese said.
March set a new record due to bidding wars: 67 per cent of homes — over two-thirds — sold above list price. That’s up 14 per cent from March 2021, according to Royal LePage’s recent report.
Overall, an average Winnipeg home costs $387,900, up 16.3 per cent from the $333,500 recorded during 2021’s first quarter.
“Demand hasn’t gone anywhere, and supply can’t keep up,” Froese said. “Real estate is a huge industry, and it’s an industry that doesn’t change on a dime… You don’t build a house in a day.”
Supply chain backlogs on materials and labour challenges continue to slow progress on home builds, said Lanny McInnes, president of the Manitoba Home Builders’ Association.
Pre-pandemic, it might take nine to 10 months to build a single-family detached home, McInnes said. Now, the same place could take over a year to complete.
“It’s still not deterring people from building,” McInnes noted. “(We’re) expected to remain very steady right throughout the year.”
The association’s most recent forecast says Manitoba will see around 7,700 new home builds this year, but that number could be pushed higher, McInnes said. It’s up from the 10-year average of 6,693 build starts per year, but lower than the over 8,000 that began in 2021.
Prices likely won’t come down, at least in the short term, Froese said.
“Any price decrease will be soft,” he said.
He’s hoping more Winnipeggers will put their homes on the market in spring (a typically busy real estate season). More supply is needed to halt the skyrocketing prices, he said.
Last Wednesday, the Bank of Canada boosted its policy interest rate another 0.5 per cent to a total one per cent, making mortgages harder to obtain. Even so, the measure won’t dampen demand right away, Froese said.
“Rising interest rates might… push some people out of the market, but not nearly enough to have a major impact on prices,” Froese said.
Instead, it might cause some shoppers who qualified for mortgages with interest rates pre-hike to buy homes sooner. Some have a window where they can still access the lower interest mortgage, but they must purchase a place in up to 120 days, depending on their agreement, Froese said.
“It speeds (buying) up in the immediate, because people now have a deadline,” he said.
And, customers looking for homes might not be deterred by the higher interest rate.
“Maybe they’ll cut back elsewhere,” Froese said, listing trips, renovations and nights out as places to reduce spending.
In its latest budget, Ottawa announced it would spend $10 billion on housing.
“It can’t come quick enough,” Froese said, adding he doesn’t expect the funding to change housing prices in the short term.
Royal LePage predicts the average home in Winnipeg will reach $385,800 by the end of the year, up eight per cent from 2021’s finish. Measures including interest rate hikes and more supply should slow the housing fervour, Froese said.
“With the rising prices, Winnipeg continues to kind of be a standout… of moderate growth,” Froese said. “It might not feel that way, but we look at other parts of the country… We’re still positioned (well) going into the rest of the year.”
The national average home price soared 25.1 per cent above its first quarter average last year, according to Royal LePage’s Tuesday report. The average national price was $856,900.
“Across Canada, the question of housing affordability has become very complicated,” said Jino Distasio, a geography professor at the University of Winnipeg who studies housing and homelessness.
The class of working poor is growing, including in Winnipeg, Distasio said.
“A $400,000 home — we’re talking about needing an income of maybe $80,000 to $100,000 to really have a good push and to afford sometimes the average house price,” Distasio said.
People with modest paying jobs — in the $50,000 to $60,000 range — might not be able to afford homes in places they could pre-pandemic, Distasio said.
“Ownership in Canada is becoming more elusive… than we’ve seen before,” he said. “Even… a $1,500 to $2,000 a month rent, that just seems unheard of in Winnipeg.”
Manitobans may stay in rental units longer than they’d like due to increasing housing prices, he added.
“We have to move up the benchmark for building true affordable housing for our very lowest income households,” Distasio said. “The whole notion of what we mean by affordable housing has changed over the last five years to include a broader range of both low and moderate incomes.”
Manitoba has 33,168 social and affordable housing units, according to a Canada Mortgage and Housing Corporation report released last November.
Of those, there were 359 vacancies. Only Prince Edward Island, Newfoundland and Yukon had fewer vacancies (Nunavut didn’t have data).
The majority of Manitoban units — 27,274 — were built between 1970 and 1989. Just 3,608 were built in 1990 or later. An average two-bedroom cost $872, as of the November report.
Gabby is a big fan of people, writing and learning. She graduated from Red River College’s Creative Communications program in the spring of 2020.
Updated on Tuesday, April 19, 2022 8:53 AM CDT: Corrects typo