Real estate forecast calls for calm year

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This article was published 08/02/2018 (2821 days ago), so information in it may no longer be current.

Activity in the Winnipeg real estate scene was the picture of a balanced market in 2017 and even though there will be some new regulatory hurdles and some possible interest rate hikes to deal with, 2018 will probably be just as calm.

At the Winnipeg Realtors Association’s (WRA) annual forecast event on Wednesday, there was clear evidence that a mature, well-functioning market is at play despite the fact that there are no double-digit growth metrics in sight.

Compared with the overheated markets in Toronto and Vancouver, the relatively modest growth in Winnipeg’s real estate scene can be a welcome relief to both buyers and sellers.

The total value of Multiple Listing Service (MLS) sales in Winnipeg in 2017 was just shy of $4 billion, up almost four per cent from 2016, but the actual number of sales was down less than one per cent and listings were down two per cent compared to the prior year.

Peter Squire, the association’s market analyst, acknowledged that heading into 2018 the combination of the city’s newly imposed impact fee on new residential development, along with more rigorous federally regulated stress tests on mortgages as well as the prospects of slightly higher interest rates concerns him a bit.

“We saw a modest drop-off in residential sales in last year, but my prediction is we will still have an excellent year in 2018,” he said.

The forecast for next year looks a lot like the aggregated totals for this year.

Winnipeg Realtors is forecasting MLS sales to be flat to down four per cent in 2018, with dollar values flat to up three per cent. Next year is likely to be the market’s first $4-billion year.

“The stability and diversity of the economy — we still have very low unemployment — means we are still firing on all cylinders,” Squire said.

“And even if the population growth slows a little in 2018 compared to 2017, there is still the residual effect of all those people who came in the last few years who still need housing.”

Squire said the mix of multi-family developments, including both condos and rentals, has also kept vacancy rates at reasonable levels. Total inventory is stable with properties taking about 30 days on average to sell at sale prices that are at par with listing prices.

The balance in the Winnipeg market is in stark contrast to places like Toronto and Vancouver.

A report released Wednesday by the Canadian Mortgage and Housing Corp. (CMHC) on escalating house prices in the country’s large metropolitan centres between 2010 and 2016 found that Toronto and Vancouver’s real estate markets have responded to surging prices and a growing demand for homes with a supply of new housing that is “significantly weaker than other Canadian metropolitan areas.”

The report said the disparity between supply and demand has been largest in the two cities, but “we do not fully know why this is the case.”

It also noted that a lack of supply in Vancouver and Toronto had buyers gravitating towards condos — which were more plentiful and have seen a spike in investor demand — as well as high-end homes. Almost all the growth that CMHC saw in prices came from expensive, single-detached homes.

A panel discussion at the WRA forecast event on commercial development focused on downtown activity that continues to gain momentum.

Angela Mathieson, president and CEO of CentreVenture Development Corp., said there are significant changes ahead. For instance, over the past 15 years there were 2,600 new residential units built downtown and already there are plans for another 2,100 on the books for the end of 2020.

Thanks to the construction of True North Square, she said the entire Graham Avenue strip will be transformed over the next four years with at least 600 new residential units being built with plenty of spinoff effects.

“Historically, this was an area of eyeglass and wedding dress shops,” she said.

“But when True North Square gets up and running and some of the other residential developments (including Artis REIT’s residential tower south of its 360 Main building and the SkyCity condo tower)… other spaces will start to fill up with independent retailers with some of those services that those residents will start to look for, at a price point you would get at True North Square.”

Developments like the $20-million James Avenue Pumping Station and new residential development being sought for The Railside at The Forks will further shake up the downtown dynamics.

Mathieson said it will create the kind of density that will lead to things like a downtown grocery store. Without providing any specifics she said, “You’ll see it. It’s coming.”

martin.cash@freepress.mb.ca