April home sales fall sharply from last year; interest rates partly to blame, local analyst says

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This article was published 10/05/2023 (852 days ago), so information in it may no longer be current.

Home sales are increasing as the weather warms, but purchases are down drastically compared to recent years.

The Winnipeg Regional Real Estate Board tracked 1,103 sales last month, a 24 per cent drop from April of 2022.

The number of sales is down 17 per cent when looking at April’s five-year average, but the past two abnormal years are “undoubtedly skewing” the data, said Jeremy Davis, the WRREB’s market intelligence director.

April 2021 marked the best sales month in WRREB history, with 2,055 sales. The following April, sales totalled 1,461.

Still, the number of residential resales in April this year was nine per cent lower than April 2019.

Higher interest rates, leading to more expensive mortgages, are one factor contributing to the reduction in sales. The Bank of Canada raised its key rate four per cent between April 2022 and April 2023, to 4.5 per cent.

Rates haven’t been at this level for about 15 years, Davis said.

“There are a lot of things going on in the market right now,” he added. “There are always a lot of factors at play.”

Inflation, personal financial circumstances and job outlooks are contributing to the current market, Davis said.

Home prices in Manitoba dropped when comparing last April to the year prior. However, all average home prices were higher than the five-year average.

The average detached home cost $409,286 last month, up eight per cent from the five-year average but down nine per cent from April 2022.

A typical condo was priced at $258,571 last month — three per cent higher than the five-year average and one per cent lower than April 2022.

Meantime, the number of homes on the market keeps increasing. The WRREB noted 3,854 listings in April, up 70 per cent from the previous year.

It’s a one per cent increase over the five-year average. Listings have gained ground every month this year, to April.

“We’ve had increases on both sales and on active listings each month since the start of the year,” Davis said. “It’s positive to see that there’s continued growth in that respect.”

April’s sales count was 90 per cent higher than last January’s.

Home purchases typically increase in the spring and summer, Davis noted.

“We’re right on the cusp of where those things start to increase,” he said. “It’ll be really interesting to see how these things shake out over the next month or two.”

In Winnipeg, the southwest corner continued to have the most expensive average home — $520,190, using data from January through April.

During the same time period, a typical southeast home cost $456,330; in the northeast, $352,070; in the north, $308,577; and in the west, $292,865.

gabrielle.piche@winnipegfreepress.com