Steady upward momentum characterized buying activity in the Winnipeg housing market during the first half of the year, with buyers taking advantage of the Bank of Canada’s temporary pause in overnight rate hikes and lower housing values. Year-to-date average price declined by almost eight per cent to $405,301, down from $439,621 during the same period in 2022.
A significant listing deficit has had an impact on sales this year, particularly at the $350,000 to $500,000 price point where demand is greatest. To date, just 3,347 properties have changed hands, down more than 20 per cent from year-ago levels. Supply is far more plentiful at the mid- to upper-end of the market, making it easier for move-up buyers to trade up to larger homes or different neighbourhoods in the $750,000 to $1 million price range.
Huge Equity Gains a Factor for Move-up Buyers in Winnipeg Housing Market
While necessity remains the primary driver for move-up activity in the Winnipeg housing market, with more space needed to accommodate growing families and, in some instances, multiple generations, equity gains have also come into consideration when deciding to upgrade. Homeowners who purchased in 2018, for instance, have realized gains exceeding 25 per cent over the five-year period, which has made financing less of a challenge due to the substantial downstroke. The sweet spot for most move-up buyers is between $700,000 and $800,000.
Communities that resonate with move-up buyers include Waverley West, Bridgewater and Sage Creek in South Winnipeg. East St. Paul and West St. Paul on the outskirts of the city are also popular, offering up newer housing stock on larger lot sizes at a lower tax base. First-time buyers remain the most active segment of the Winnipeg housing market in large part due to the affordability factor, with the move-up cohort representing just five per cent of the overall market.
While the Bank of Canada rate pause in January served to re-ignite home-buying activity in the city, the most recent hike has put a damper on the market. There has been an uptick in offers conditional on the sale of existing properties as a result. Some sellers are offering concessions on closing that include covering some of the buyers moving expenses; a portion of their land transfer tax; or $500 toward the buyer’s legal fees.
Pre-approved buyers with rate holds – many of whom have yet to purchase – are expected to prop up housing sales over the softer summer months. The Winnipeg housing market should pick-up steam in September, in line with the traditional fall upswing, with home-buying activity expected to remain stable for the remainder of the year.