Cooling housing market sees drop in demand, prices TD Bank predicts 10% decrease in the cost of a Manitoba home by early next year
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This article was published 30/08/2022 (283 days ago), so information in it may no longer be current.
Manitoba home prices could drop nearly 10 per cent by early 2023, a new TD Bank forecast suggest.
The national bank projects Manitoba’s average house to cost around $340,000 early next year — well below the $370,000 of 2022’s second quarter (and Manitoba’s peak quarter for average house prices).
“Demand is falling in Manitoba in response to higher interest rates, and that will put some downward pressure on prices,” said Rishi Sondhi, a TD Bank economist and author of the institution’s latest Canadian Housing Outlook.
TD Bank published the national report Monday. It highlighted potential home price decreases reaching 25 per cent in larger Canadian markets.
Manitoba home prices are expected to be up three per cent by the end of 2022, compared to a year earlier. It’s a departure from provinces including Ontario, British Columbia and Alberta, where year-over-year price decreases are forecasted.
“Affordability isn’t as strained in Manitoba (as markets like Toronto and Vancouver),” Sondhi said. “(It) can handle the higher interest rates that we’re seeing.”
Pre-pandemic, Manitoba’s home prices were relatively steady. Already, places in Ontario were getting more expensive.
During the pandemic, Manitoban home prices shot up, mirroring provinces across the country.
“The starting point is much better, much more favourable from an affordability perspective for Manitoba,” Sondhi said.
The average Manitoban single family home cost $400,000 last July. Nationally, the average home price was $629,971, according to the Canadian Real Estate Association.
“Affordability isn’t as strained in Manitoba (as markets like Toronto and Vancouver)… (It) can handle the higher interest rates that we’re seeing.” – Rishi Sondhi
Sondhi doesn’t anticipate major increases to Manitoba home prices in the new year. The province’s economic growth has been good so far, but it’ll likely slow “quite significantly,” he said.
“Inflation is running pretty hot, and that’s eating away at people’s abilities to spend on different things,” Sondhi said. “If your money’s kind of losing its value, you have to be… more choosy on what you spend on.”
That includes housing.
“If you don’t have any increases in home sales, then that means prices are not going to (increase) by that much,” Sondhi said.
It’s been a slower summer than last for Blake Vasko, a Manitoba real estate agent.
“Many homes are now sitting on the market for a few days longer,” Vasko said.
Often, sellers are getting their asking price or a bit lower. Some still receive multiple bids, but they’re outliers, Vasko said.
“They’re no longer getting 10 offers like they were six and eight months ago,” he said. “They’re maybe getting two or three.”
He attributes the slowdown to more houses coming on the market and the rise in interest rates — potential buyers may not be qualifying for the mortgages they want, Vasko said.
Last year was the first in over a decade where Manitoba saw a more than 10 per cent increase in its average housing price, according to Peter Squire, the Winnipeg Regional Real Estate Board’s market intelligence lead.
May 2022’s average single family home price ballooned above $454,000 — a peak for Manitoba.
“That’s all settling down, which was bound to happen — it was not sustainable,” Squire said.
The province neared 4,000 active listings Tuesday, he said. There was a shortage at the beginning of the year — roughly 1,800 listings at a given time.
The market isn’t balanced yet, but it’s nearer to normalcy, Squire said.
“I still see us as being a stable housing market,” he said, noting that volatility and movement happen month to month everywhere.
In July, the average prices for attached homes and condos were $323,478 and $271,901, respectively.
July 2021 saw average prices of single family, attached homes and condos at $377,789, $321,334 and $258,770, respectively.
Detached home averages have tended to skew towards larger and more expensive home purchases, Squire noted. Last month, the number of minimum $500,000 purchases declined, he said.
In July 2019, Manitoba’s average single family home cost $323,686 — more than $70,000 less than last month’s average.
The keystone province will remain among the most affordable in Canada, even with the projected house price decreases in markets like Ontario and British Columbia, TD Bank’s Sondhi said.
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.