No summer break for sizzling Winnipeg resale homes market

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This article was published 08/08/2017 (3016 days ago), so information in it may no longer be current.

Winnipeg’s sizzling resale homes market showed no signs of cooling last month, although one industry official said that’s about to change.

A total of 1,438 properties were sold through the local Multiple Listing Service (MLS), the Winnipeg Realtors Association (WRA) said Tuesday. Not only was that the second-highest July total in the association’s 114-year history, it was also six per cent higher than July 2016’s tally of 1,350 units, and six per cent above the 10-year average for the month.

Last month was also the first time the dollar volume of sales for July surpassed the $400-million mark, at $416 million.

The strong showing came on the heels of the second busiest June on record and the strongest May in the association’s history.

It left MLS sales running slightly ahead of last year’s record-breaking pace after the first seven months of the year, at 8,508 units. The dollar volume of sales was up nearly five per cent to $2.5 billion.

WRA president Blair Sonnichsen predicted early last month that home sales would remain strong through July as the market played catch-up from a slower-than-expected first quarter. He also predicted sales would slow in August and in the first half of September before rebounding again for a few months in the fall.

He said Tuesday that’s the usual pattern — and this year likely won’t be an exception.

“This is our six-week lull we’re in right now,” he added.

There had been concerns tougher federal mortgage requirements would also slow sales this summer, but Sonnichsen said that was offset by strong demand for all property types. “I cannot emphasize enough that in our local market we have different affordable options to choose from.”

He attributed the strong demand to a growing population, low unemployment numbers and low mortgage rates.

The WRA noted condominiums were a big seller in July, with sales up 32 per cent from a year earlier at 207 units. That’s one of the highest monthly totals on record for condo sales, it added.

Sonnichsen said the new mortgage rules, which came into effect last fall and require stricter stress tests for homebuyers applying for an insured mortgage, are actually helping to fuel the demand for condos. That’s because they have forced some first-time buyers to adjust their expectations and purchase less expensive homes. In some cases, that means buying a condo, townhouse or side-by-side, rather than a detached home.

“If they were looking for a $350,000 home and they now qualify for a $290,000 home, they’re making that adjustment and buying the $290,000 (home),” he said.

The good news for condo buyers, he added, is that despite the surge in condo sales last month, there are still plenty of them available.

“There is still a lot of product in the condo market to choose from… because as they are selling, more units are being brought onto the market by developers. I think that is going to be our cycle for the next couple of years, quite frankly.”

Sonnichsen said there are also signs some homeowners who were thinking of moving up to a newer or larger home are, because of the stricter stress-tests, opting instead to renovate their existing home. That’s part of the reason why there are fewer new listings coming onto the market this summer, he added.

But one of the benefits of having fewer new listings is that it helps to stabilize prices, he said.

“When you reduce the supply and demand remains constant, prices will stay up. And that’s where we are at right now. Prices are holding.”

murray.mcneill@freepress.mb.ca