REAL ES­TATE MAR­KET ‘SLOW AND STEADY’

Hous­ing prices rose slightly, sales vol­ume dropped in 2018

Winnipeg Free Press - - FRONT PAGE - MARTIN CASH [email protected]­ress.mb.ca

Win­nipeg house prices in 2018 were up slightly. Ac­cord­ing to Win­nipeg Real­tors, the av­er­age res­i­den­tial-de­tached or sin­gle-fam­ily home sale price in 2018 was $321,945, a mod­est in­crease of two per cent over 2017

THE year-end num­bers for the

2018 hous­ing mar­ket are out; by all ac­counts, the Win­nipeg real es­tate mar­ket con­tin­ues to per­form in an or­ga­nized, bor­ing man­ner.

But when it comes to the real es­tate mar­ket, for those in the midst of it — home­own­ers and buy­ers — bor­ing is good.

Late last week, both Win­nipeg Real­tors As­so­ci­a­tion and Royal LePage came out with the tab­u­lated num­bers. Not sur­pris­ingly, both blamed slightly lower sales vol­umes on the im­ple­men­ta­tion early in the year of fed­er­ally man­dated stress-test thresh­olds that were de­signed pri­mar­ily to tamp down sky­rock­et­ing prices in Toronto and Van­cou­ver.

Win­nipeg house prices in 2018 were up slightly. Ac­cord­ing to Win­nipeg Real­tors, the av­er­age res­i­den­tial-de­tached or sin­gle-fam­ily home sale price in 2018 was $321,945, a very mod­est in­crease of two per cent over 2017.

Ac­cord­ing to Royal LePage house price sur­vey data, the ag­gre­gate price of a home in Win­nipeg was up 3.1 per cent.

If there is any seg­ment that’s lag­ging, it’s the con­do­minium mar­ket. It took about two weeks longer to sell a condo than a res­i­den­tial de­tached home in

2018, said Win­nipeg Real­tors. Royal LePage said prices fell by

5.8 per cent.

While their num­bers dif­fer slightly, both Peter Squire, mar­ket an­a­lyst with Win­nipeg Real­tors As­so­ci­a­tion, and Liz Tay­lor, a Win­nipeg Royal LePage sales rep­re­sen­ta­tive/as­so­ci­ate bro­ker, agreed that the Win­nipeg mar­ket kept chug­ging along, only down slightly from

10-year av­er­ages.

Homes took only about one day longer to sell, on av­er­age, than it took them to sell in 2017, a near-record year.

“We are slow and steady,” Tay­lor said. “It’s not sexy, but it is the truth.”

The to­tal sales vol­ume of 12,773 was down five per cent from 2017, and six per cent from the best year on record, 2016. That was one per cent off the 10-year av­er­age, but the mar­ket was deal­ing with the af­ter­math of five in­ter­est-rate hikes and a sec­ond stress-test imposition.

So all things con­sid­ered, it was a pretty good year.

“Last year, the main dif­fer­ence was some buy­ers just weren’t able to buy the house they wanted given the new rules and higher rates. They de­cided to sit on the side­lines in 2018 and re­group and fig­ure out what they were go­ing to do,” Squire said.

The Of­fice of Fi­nan­cial In­sti­tu­tions (OSFI) rule that took ef­fect Jan. 1, 2018, re­quires mort­gage ap­pli­cants to show they can af­ford mort­gage pay­ments that are two per­cent­age points higher than the rate they have ne­go­ti­ated with their mort­gage providers.

That fol­lowed the stress test from the fall of 2016 that was only im­posed on in­sured mort­gages — those where the buyer was putting down less than 20 per cent of the pur­chase price. But start­ing in 2018, all home­buy­ers had to show the same fi­nan­cial ca­pac­ity, and that meant some peo­ple were not able to buy the house they wanted. Some de­cided that if they couldn’t buy the home they wanted, they were pre­pared to wait.

“I be­lieve it was a fac­tor, es­pe­cially in some of the higher-priced ar­eas,” Tay­lor said. “It is in­fin­itely frus­trat­ing be­cause they (OSFI) came in and did the sweep­ing stress test meant to cool the mar­kets in Toronto and Van­cou­ver. It worked for them. But real es­tate is so lo­cal and we were not see­ing the same is­sues as those big mar­kets were. It cooled us a lit­tle, too.”

Ac­cord­ing to the Royal LePage re­port, Win­nipeg’s av­er­age house price in 2018 was $305,763 in­clud­ing two­s­torey, bun­ga­lows and con­do­mini­ums. (This, ac­cord­ing to its data, was an in­crease of 3.1 per cent from last year.)

While Win­nipeg­gers might be­moan the fact that house prices aren’t in­creas­ing by dou­ble dig­its like they were in 2006 and 2007, the av­er­age price here is in ex­cess of 50 per cent lower than the na­tional av­er­age, which Royal LePage pegs at $631,223.

“We are not in a bad place,” Squire said. “Af­ford­able hous­ing is good. It is an ad­van­tage to our hous­ing mar­ket. Af­ford­abil­ity is one of our strengths.”

Peter Squire of the Win­nipeg Real­tors As­so­ci­a­tion says Win­nipeg’s real es­tate mar­ket is in a rea­son­able po­si­tion, call­ing the af­ford­abil­ity of hous­ing ‘one of our strengths.’

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