Is the Winnipeg real estate market deterring first-time homebuyers? At first glance, it would appear that the monumental growth of the city’s housing market is preventing young families from purchasing a single-family home or a condominium. However, once you start scratching beneath the surface, you begin to see that Winnipeg is far more affordable and steadier than other urban centres.
The Winnipeg housing sector is witnessing record-setting growth, thanks to soaring demand that has been fueled by evolving consumer trends and historically low interest rates. Most projections show that rapid sales activity and higher prices are here to stay in Winnipeg and the broader province.
Now might be one of the best times to acquire a home in Winnipeg. That is, if you can find a property in a market where there is shockingly low supply.
Winnipeg’s Record-Breaking Activity Continues into 2021
Despite a bitterly cold February, sales activity was up throughout the Winnipeg real estate market. So far, 2021 is already experiencing record-setting month-over-month growth, extending the momentum the urban centre witnessed in the second half of last year.
So, just how good was February to the Winnipeg real estate market?
According to the Winnipeg Regional Real Estate Board (WRREB), residential sales surged 48 per cent year-over-year in February, recording 1,240 transactions. Although condominium and single-family detached homes were the biggest drivers of the market, WRREB data highlighted growth in vacant land sales (139 per cent) and duplexes (138 per cent).
Housing prices also popped in Winnipeg and surrounding rural communities. The monthly snapshot of the city’s real estate market highlighted that Winnipeg’s average residential-detached sales price surged more than 21 per cent to $378,234. The average sales price for similar homes in rural locations rose slightly by four per cent to $325,787.
The most significant factor impacting the housing sector has been supply. Active listings tumbled 41 per cent year-over-year to 2,051, while new listings fell three per cent to 1,661.
Put simply, the Winnipeg real estate market is pushing the pedal to the metal, especially with spring on the way, says Kourosh Doustshenas, president of the Winnipeg Regional Real Estate Board.
“New listings entered on our MLS® in February are in keeping with previous years. The difference in 2021, and much like the second half of 2020, is we are experiencing record-setting month over same month sales, so sellers remain in the driver’s seat,” said Doustshenas in a news release.
“Momentum from 2020 continues uninterrupted in 2021. I see no signs of it letting up as we head into March and in all likelihood will see a quick start to our spring market.”
So, with Winnipeg fully entrenched in a housing boom, how does it compare to the rest of the country?
Winnipeg Real Estate Remains Affordable for Homebuyers
What is occurring in Winnipeg is comparable to what is happening all over the country: too little supply and soaring demand. This has created a situation whereby bidding wars, bully bids, and skyrocketing prices have become the norm in what had been Canada’s most affordable markets. The demand for housing is so pronounced in Winnipeg and other Canadian cities, some homebuyers waive inspections to improve the odds of landing a home.
At the same time, the Bank of Canada (BoC) has cut interest rates to nearly zero. The latest comments from policymakers suggest that rate normalisation and policy tapering are unlikely to happen at least for another year as officials wait for the economic recovery to be well underway.
Still, according to a new study by the National Bank of Canada (NBC), housing affordability in Winnipeg is much better than other jurisdictions. Researchers utilised income and price benchmarks to calculate the numbers. The report found that given the median income of $74,000 in Winnipeg, the average residential property costing around $230,000 would consume 22.2 per cent of the household’s pre-tax income. In Vancouver, that number soars to 82 per cent. In Toronto, it sits at 59.1 per cent.
NBC officials do not think the countrywide housing boom will abate, predicting higher prices amid low interest rates and vaccine rollouts. This, of course, will lead to bigger down payments and mortgages. As the study’s authors Kyle Dahms and Camille Baillargeon noted in the report, “At a national level, there has never been a worse time to accumulate the minimum down payment.”
Until new supply comes to market and becomes more widespread, it is going to be challenging for new homebuyers to purchase a property. But there is some hope. According to the Canada Mortgage and Housing Corporation (CMHC), housing starts in Winnipeg have advanced 27.95 per cent year-over-year in January.
Modest Growth in 2021 for the Winnipeg Housing Market?
In the Winnipeg Housing Market Outlook (2021), RE/MAX forecast that Winnipeg housing prices would increase three per cent to an average price of $291,976.16 as it continues to be a seller’s market. The housing industry could see a flurry of activity as homeowners could enter the fray and reassess their financial situations, choosing to either up or downsize in 2021. This might be the ideal opportunity for first-time homebuyers to make that giant leap, finally.