Real estate chill not seen here

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This article was published 3/8/2012 (3623 days ago), so information in it may no longer be current.

Canada's two hottest housing markets may finally be cooling, but industry officials insist the chill hasn't descended on Winnipeg, in spite of two consecutive monthly declines in MLS sales.

On the contrary, Canada Mortgage and Housing Corp. is still predicting Winnipeg will set a record for MLS sales this year.

Officials with both CMHC and WinnipegRealtors said Friday the two per cent sales declines in both June and July were too small to be considered a sign of a slowdown.

WR president Shirley Przybyl said only 21 fewer properties sold last month than in July 2011 -- 1,225 versus 1,246 a year earlier. That's a drop in the bucket when more than 1,200 properties changed hands, she said.

Przybyl said bidding wars are also still occurring on some properties, and 43.5 per cent of the homes that sold last month went for more than the asking price -- both signs of a vibrant market.

"If it is (cooling down), we would say it is because that would mean some relief for buyers. But I just don't see that."

CMHC regional economist Lai Sing Louie doesn't see it either.

"Overall, we're still projecting demand will remain elevated and sales will hit a record high this year," Louie said.

The record for unit sales in a single year is 12,319, set in 2007. Winnipeg came close to topping it last year with 12,297, and CMHC is forecasting 12,400 for this year.

And the agency is also still predicting a five per cent increase in average selling prices for this year. That would be more good news for homeowners who may have been fretting that house values might decline in light of reports in recent days of the market slowing in Vancouver and Toronto.

Louie said many of the factors that have helped to stoke demand for housing in Winnipeg for much of the past decade are still in play. They include healthy economic growth, decent employment gains, low interest rates, high consumer confidence levels and strong population gains.

He said June's tightening of federal mortgage insurance rules may dampen demand a little in Winnipeg for a couple of months. But the impact of the positive forces still at play should soon overshadow that.

The new federal mortgage rules that took effect in June included reducing the maximum amortization period for CMHC-insured mortgages to 25 years from 30 years. The federal government introduced the changes in hopes they would help cool some of the country's most overheated markets, such as Toronto and Vancouver.

And new data issued Thursday indicate that's exactly what may be happening. Last month was the slowest July in more than a dozen years for MLS sales in Vancouver, and condo sales in Toronto plunged by 50 per cent in the second quarter of the year.

But when you compare what's happening there to what's happening here, Winnipeg's market still looks pretty robust, said Peter Squire, WR's residential-market analyst.

"We're not shooting the lights out, but we're still doing well," Squire said, noting last month's MLS sale total was still slightly above the 10-year average for July of 1,223.

The one area where there was a noticeable slowdown last month was in condominium sales. It took an average of 14 days longer to sell a condo than it did in June -- 41 versus 27.

Squire and Przybyl said they're not sure what caused the sudden change, although Squire said he wonders if the recent mortgage rule changes might have priced some first-time buyers out of the market for lower-priced condos.

murray.mcneill@freepress.mb.ca