Hey there, time traveller!
This article was published 13/7/2011 (3042 days ago), so information in it may no longer be current.
THE TD Bank predicts Winnipeggers are about to witness something one local housing official says they haven't seen in more than two decades — a drop in housing prices.
In a special report issued Wednesday, the chartered bank says Canada's resale-homes market is poised for a moderate correction in 2012 and 2013, and Winnipeg won't be spared.
It predicts Winnipeg's average selling price will peak in the third quarter of this year at $245,000, drop by 7.8 per cent over the course of 2012 and the first half of 2013 to bottom out at $231,000, then level off.
Although that might shock homeowners used to seeing double-digit price increases for much of the last decade, TD Economics deputy chief economist Derek Burleton said prices will basically return to 2010 levels.
"It's still a relatively stable housing market," he said. "It just means some recent gains will be reversed."
The bank also predicts the price correction will be accompanied by a 7.9 per cent decline in house sales.
However, WinnipegRealtors president Ralph Fyfe wasn't buying any talk of a price drop or a significant slowdown in sales.
"I think they're blowing smoke. I can't see those numbers at all."
Fyfe said Winnipeg might see a slight dip in house sales next year, but he expects a further six to eight per cent increase in prices.
"I've been selling real estate for more than 30 years, and I can't remember the last time I saw prices decline. It might have been in the late 1980s — '88 or '89 — and it was probably just at the high end of the market."
TD predicts cities like Vancouver (-14.8 per cent), Toronto (-11.7 per cent), Saskatoon (-11.1 per cent) and Ottawa (-8.3 per cent) will see even bigger price drops over the next two years. Winnipeg's declines will be well below the national average decrease of 10.2 per cent in sales and 15.2 per cent in prices, it adds.
Burleton said there are a number of developments that are expected to cool Canada's housing markets. They include an expected increase in mortgage rates in 2012, more muted economic and household-income growth, stricter borrowing rules for insured mortgages, and eroding affordability.
He said one of the things working in Winnipeg's favour is that owning a home here is still more affordable than in most other major Canadian cities. The local economy, incomes and population should continue to grow, although at a slower pace.
— with files by Postmedia News