2024 looking better for buyers, sellers

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This article was published 15/01/2024 (626 days ago), so information in it may no longer be current.

Winnipeg’s housing market closed 2023 on the upslope — an encouraging sign, professionals believe, for what’s to come in 2024.

December’s 2,959 listings and 635 sales were up eight and 12 per cent, respectively, from 2022. Overall dollar volume and average sales price in the final month also finished higher than the previous year with the average residential detached dwelling going for $405,702, a seven per cent increase.

It was the third time in the back half of 2023 that every major statistical category saw a year-over-year increase.

“In my opinion, it was a pretty respectable year from what I see of the stats, so far,” said Rena Prefontaine, president of the Winnipeg Regional Real Estate Board. “I think when you compare to the five-year average, we’re a little bit below the five-year average but very comparable to 2019. And if you compare it even out to 10 years, it’s still a very respectable year we had in 2023.”

Winnipeg’s 12,978 sales were the lowest in the last five years. However, listings — there were just 22,505, the second-fewest in the last five years — sold at a 57.67 per cent rate. For comparison, 2019, which is used as a benchmark due to it being the last year before the pandemic, saw 25,851 listings and 13,601 sales (52.61 per cent sale rate).

A residential detached home sold for an average of $399,430 in 2023, a steep drop from the $412,745 average of a home in 2022, but a 7.46 per cent increase over the five-year average. Condominiums went for $259,420 on average, down from $264,567 in 2022.

The beginning of the year brought uncertainty to consumers coming off a 2022 that saw borrowing rates jump nearly four percentage points, from 0.5 to 4.25 per cent. It didn’t help that rates hiked again to 4.5 per cent shortly after the calendar flipped. Listings, price tags and sales activity all slid, as a result, creating a quieter-than-normal spring in the Manitoba capital.

These days were stark in contrast to the busy pandemic years that saw record-breaking numbers in sales and dollar volume.

“Buyers had to adjust, they had to adjust their spending and adjust budgets at home… sellers were also adjusting to the reality of the market, that it wasn’t a lottery anymore where they could put up a sign and have 30 offers and (sell) for $50,000 over (ask),” said Michael Froese, managing broker with Royal LePage Prime Real Estate.

“What (2023) was, was crawling back out of the depths of the darkest part of our market’s history probably. But then the market did behave quite well, in my opinion.”

Froese said he left 2023 unconcerned with the year as a whole. In fact, the latter parts of the year left him rather optimistic about where the market is positioned in 2024 and that, perhaps, it’s the most stable its been since 2019.

Demand is expected to increase again once the snow melts, as it usually does. It could even be a busier spring than normal, but that could depend on whether interest rates move again later this month.

The Bank of Canada’s next decision is Jan. 24. It has held its 5 per cent lending rate for the last three rounds of decisions, and many of the country’s leading predictors are convinced rates have peaked and that a cut could be in store.

“What’s going to be the big difference is there is going to be consumer confidence with all of these (factors) like inflation stabilizing, rates stabilizing, if not dropping, and price stabilizing… You’re going to see people who had been waiting or who didn’t have to move maybe now when rates do drop, you’re gonna see them potentially come back into the market,” Froese said.

Also worth noting is the number of housing starts that could impact the market in the coming years. An estimate of expected housing starts in Winnipeg this year could not be uncovered by press time.

A surge is in store, given the city’s $122 million grant from the federal government’s Housing Accelerator Fund in December. The cash is expected to help erect 3,166 housing units over the next three years, including about 900 categorized as “affordable.”

The grant came after the city passed new bylaws that allow construction of up to four housing units on a single lot, buildings of up to four storeys anywhere within 800 metres of transit corridors and mid-rise housing targeted for mall-area sites and commercial corridors. As a result, the need for public hearings and city committee approvals to complete such projects was eliminated.

Inventory continues to rebound from the pandemic. In 2019, there were about five and a half months of inventory available. There are about four and a half months of inventory currently.

“We’re getting closer to replenishing that,” said Prefontaine. “Of course, in the beginning of the pandemic, there was very little inventory so that’s what made the prices jump so high, so we’re definitely getting back to replenishing that inventory, which is great for buyers and sellers.”

Froese maintained 2024 will be a better year for buyers and sellers, as consumers have settled into the new reality of prices and made the necessary adjustments for home ownership.

“The market fundamentals,” he said. “Demand is still very strong, people want to buy homes, people want to live in Winnipeg — it’s still one of the most affordable major city centres in Canada — so those are beacons and those are still true.”

jfreysam@freepress.mb.ca