President says strong housing market activity expected to continue

During February, the majority of homes sold through MLS® in Winnipeg went for over $200,000, which contributed to a new dollar volume record for the month.

Dollar volume was up nine per cent from the previous best recorded in February 2008.

WinnipegREALTORS® said 56 per cent of residential-detached homes sold for above $200,000, while the under $100,000 sales dipped to only eight per cent compared to 11 per cent in February 2009.

One of every four homes sold within the $200,000 to $249,999 price range.

The condominium market showed a similar increase with one of every three units selling between $150,000 to $199,000, while in February last year the same price range only experienced one-in-five unit sales. Previously, more condos sold in the $100,000 to $149,999 price range.

Claude Davis, president of WinnipegREALTORS®, said February market activity showed real improvement over January this year and February last year.

Davis said a clear indication of the difference is the number of homes selling in February for over their list price. According to WinnipegREALTORS® statistics, 44 per cent of homes sold for over their list price last month compared to only 22 per cent in February 2009.

“One carry-over from January was the tight inventory situation in a number of Winnipeg neighbourhoods,” said Davis.

Fewer listings in desirable MLS® areas resulted in homes only being on the market for two weeks or less, while the overall average was 29 days for Winnipeg and surrounding municipalities, Davis added.

“We expect to see a continuation of strong market activity with more listings coming on stream as move-up buyers take advantage of affordable mortgage rates before an expected rise in rates occurs later this year,” Davis said. 

The recent 17th annual RBC Homeownership Survey  showed 75 per cent of respondents in Manitoba and Saskatchewan were concerned about an interest rate increase in 2010.

Meanwhile, they also indicated a strong intention toward home buying. In the two provinces, 28 per cent indicated they were likely to purchase a home in the next two years, which is up by three per cent from last year.

The survey found that 91 per cent of the respondents believe buying a home is a good investment.

Year-to-date MLS® unit sales to the end of February were up one per cent and dollar volume sales rose by 13 per cent when compared to the same period in 2009.

In a recent report on the housing market, Canada Mortgage and Housing Corporation said it expects only a moderate growth in existing house prices over the next two years, with an average increase of five per cent this year and a 3.8 per cent increase in 2011.

CMHC said the modest increases reflects a projected rise in multiple-family construction to relieve the pressure placed on residential-detached homes.

By February, 283 multiple-family units — semi-detached, row housing and apartments — were under construction in Winnipeg, which was already half of last year’s production.

“This level of activity is very unusual for this time of year in Winnipeg,” said Paul Caton, CMHC’s senior market analyst. “The last time this many starts were recorded in the first two months of a calendar year was in 1987.”

CMHC also reported a nine per cent increase in new home construction during the first two months of 2010 when compared to the same period last year. Increased new home construction is also a factor in relieving the pressure on the existing home market.