Econ­o­mist bears good news for home sales

Winnipeg Free Press - Section G - - HOMES - By Mike Moore

WIN­NIPEG Re­al­tors re­cently held a break­fast ses­sion fea­tur­ing re­spected econ­o­mist Benjamin Tal. Tal spoke to a sold-out au­di­ence about the econ­omy in gen­eral and, more specif­i­cally, the hous­ing mar­ket. His mes­sage was good news mixed with some cau­tion. He noted the lower Canadian dollar should help the man­u­fac­tur­ing com­mu­nity when it comes to cross-bor­der trad­ing. A stronger man­u­fac­tur­ing sec­tor is im­por­tant to a city like Win­nipeg. He also fo­cused on the cen­tral bank’s de­ci­sion to drop its key lend­ing rate. This will fur­ther push down mort­gage rates, which then in­vari­ably leads to in­creased home sales. The de­crease in mort­gage rates is sec­ondary in Canada and Man­i­toba to the mes­sage the econ­omy is sta­ble, the dollar is solid and ev­ery­one should be com­fort­able with busi­ness as usual. The naysay­ers and prophets of doom were set straight when Tal spoke against the ex­is­tence of a real es­tate bub­ble and the pos­si­bil­ity of a crash. He agreed the mar­ket will be tested, cer­tainly in some re­gions more than oth­ers, but it is still strong. One ma­jor ben­e­fit of con­tin­u­ing low mort­gage rates is home­buy­ers are able to pay down their mort­gages at a faster rate. He pro­jected in­ter­est rates would not in­crease un­til 2016 or 2017. This would al­low buy­ers to lock in or re­new at th­ese great rates. The im­pact of pos­i­tive in­ter­est rates can be seen in the lo­cal hous­ing in­dus­try. Win­nipeg Re­al­tors re­ports in­ven­tory has in­creased over the past year, thereby mak­ing Win­nipeg a more bal­anced mar­ket for buy­ers and sell­ers. This rep­re­sents a change from what was pre­vi­ously a sell­ers’ mar­ket. With this in­creased re­sale in­ven­tory, com­bined with the wide se­lec­tion of new homes avail­able on the mar­ket, the time has never been bet­ter for con­sumers to look for a new home. The first-time buyer has al­ways been a prime mar­ket as young peo­ple look to es­tab­lish roots in the com­mu­nity and es­tab­lish per­sonal eq­uity. Those look­ing to up­grade to a new home are still hav­ing suc­cess in sell­ing their ex­ist­ing homes for ex­cel­lent prices as home prices con­tinue to in­crease year af­ter year. Those look­ing for a new home have been vis­it­ing show homes con­sid­er­ably more fre­quently this year, likely due in part to a much milder win­ter. Things heat up even more in March when the Spring Pa­rade of Homes takes place from March 7 to March 29.

Mike Moore is pres­i­dent of the Man­i­toba Home Builders’ As­so­ci­a­tion


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