Non-resident buyers give Manitoba a pass
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Hey there, time traveller!
This article was published 19/07/2022 (326 days ago), so information in it may no longer be current.
Few outsiders want a piece of Manitoba.
The keystone province had the lowest non-resident ownership of all the provinces, a new Statistics Canada report on housing shows.
Just 1.5 per cent of homes in Manitoba were owned by non-residents in 2020.
Lorne Weiss, a director at large with the Manitoba Real Estate Association, said it makes sense.
“Most of the non-resident purchasers in Manitoba are likely families who are buying homes while their children are attending secondary and post-secondary education in Manitoba,” Weiss said.
Not surprisingly, Vancouver had the highest share of homes owned by non-residents, at 4.2 per cent, followed by Toronto at 2.7 per cent.
Buyers from out-of-province and foreign buyers are typically attracted to coastal cities and urban hubs, Weiss said.
Although Manitoba is not popular with outsiders, one expert said he gleaned a bit of positive news from the report.
It notes relevantly higher ownership rates among new immigrants and Canadians under 35 compared to the rest of Canada. Sixteen per cent of all homebuyers in Manitoba were recent immigrants. During the 2019 calendar year, 36.6 per cent of buyers in Manitoba were under the age of 35.
“It’s a positive sign that young people and newcomers are able to get into the housing market in Manitoba,” said Josh Brandon of the Social Planning Council of Winnipeg. “That shows strength in our immigration policies and in our housing policies.”
Immigrants made up 18.3 per cent of Manitoba’s population, according to 2016 Census data, and are settling at a higher rate in Prairie provinces than in the past, the report said.
About 80 per cent of recent immigrant buyers in Manitoba purchased homes as a pair, 13.5 per cent as single buyers and 6.1 per cent in groups of three or more.
“Homeownership has been, over recent decades, a really powerful tool for households to build up equity,” Brandon said. “When newcomers are able to purchase housing, that gives them a tool to build up equity and stability.”
Manitoba’s housing affordability compared to other jurisdictions persuades young people to buy homes in the province, Weiss said.
“There’s a huge demand for people in all areas in our economy… so the incentive for young Manitobans to purchase here and stay in Manitoba is very strong right now,” Weiss said.
The median property price purchased by buyers under 35 in Manitoba was $260,000 — half as much as buyers under 35 pay in Vancouver, where the median in the same category is $520,000, the Statistics Canada report said.
Other relevant factors not in the report include the impact of the short-term rental market and a more detailed breakdown of foreign ownership, Brandon said, adding the numbers are from 2020 and likely don’t reflect the current housing market.
The recent decision by the Bank of Canada to hike its prime lending rate will dampen demand, he said.
Stress tests buyers must undergo to determine whether they can afford the mortgage are pushing them to accept a higher financing risk, Weiss said. The interest rate hike will make it even more difficult for buyers to qualify for mortgages, he said.
Since much has changed between 2020 and 2022, including in the housing market, Brandon believes it will be interesting to see how the data will shift.
“Our housing market is very much in flux, and this is just a snapshot of that market,” Brandon said.