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This article was published 8/11/2017 (1692 days ago), so information in it may no longer be current.
Winnipeg’s hot housing market showed signs of cooling in October, although it’s still shaping up to be another banner year for the industry.
The Winnipeg Realtors Association (WRA) said Wednesday that 1,023 properties were sold last month through the local Multiple Listing Service (MLS). That’s down 10 per cent from a year earlier, when 1,138 properties were sold, and four per cent below the 10-year average for October.
The pullback in activity came on the heels of the second busiest September in the association’s 114-year history, with nearly 1,200 properties changing hands.
On the new-homes side, Canada Mortgage and Housing Corporation (CMHC) also reported Wednesday that single- and multi-family housing starts in the Winnipeg Census Metropolitan Area (CMA) were down 17 per cent from a year earlier — 286 units compared to 344. That was after a 19 per cent year-over-year increase in starts in September.
The WRA attributed the October slowdown in MLS sales to a softer first-time-buyers’ market and an unusually high number of sales in October 2016, when buyers were scrambling to complete their purchases before tougher new federal mortgage-qualification rules took effect last Oct. 17.
It noted that last month there were fewer sales of houses and condominiums valued at under $300,000, which is typically the most popular price range for first-time buyers.
"October sales results clearly showed how government intervention into the real estate market has affected it," said WRA’s Blair Sonnichsen. "The first-time buyer market for residential-detached properties has been softer this year, and conversely, more affordable property types such as single-attached and townhouses have performed better."
The association noted sales of single-attached homes and townhouses are up 10 per cent and 23 per cent respectively so far this year, while sales of detached homes are down two per cent.
But despite last month’s slowdown in sales, 2017 is still shaping up to be one of the busiest on record, with less than 200 more sales needed in the final two months to top last year’s record of 13,632 sales. It’s also on track to set a new record for dollar volume of sales in a single year.
The WRA also noted even more stringent mortgage-qualification rules, which take effect Jan. 1, is also helping to fuel sales of million-dollar-plus houses and condos in Winnipeg. It noted 45 such properties were sold during the first 10 months of this year, compared to 27 in 2016 and 20 in both 2015 and 2014.
Sonnichsen said the new stress test, which will apply to both CMHC-insured and uninsured mortgages, will require buyers to qualify for a mortgage at an interest rate that’s two percentage points higher than the current posted rate. That means they’ll have to show they can afford monthly payments nearly double what they’ll actually be paying. If they can’t, they’ll have to settle for a smaller mortgage loan.
So to avoid that, some buyers have either been completing their purchase or getting pre-approved for their mortgage before the new stress test kicks in, Sonnichsen added. And he expects that trend to continue for the remainder of 2017.
On the new-homes side, CMHC said that after a surge in housing starts throughout most of 2017, the pace of new-home construction moderated in October.
"Units under construction are at elevated levels in both the single- and multi-family sectors, which is likely contributing to some of the pullback in total housing starts," it said.
But even with October’s pullback, starts were still running 49 per cent ahead of last year’s pace after the first 10 months — 5,475 units compared to 3,682.
murray.mcneill@freepress.mb.ca
