The latest Royal LePage House Price Survey shows strong price appreciation across all housing types in Winnipeg for both the first quarter of 2010 and year-over-year.
Winnipeg’s real estate market continues to prosper in 2010 due to home buyers taking advantage of low interest rates. The Bank of Canada is expected to announce a rise in its rate in July which will have an effect on mortage rates.
City-wide, detached bungalows posted the largest year-over-year price increases, climbing 11.9 per cent to $259,313. Prices for standard condominiums rose 11.2 per cent to $162,157, while standard two-storey homes were up 9.6 per cent year-over-year to $277,375.
“Our market continues to stay competitive,” said John Froese, a broker for Royal LePage Prime Real Estate. “Prices are continuing to rise as first-time home buyers take advantage of low interest rates in a very economically viable market.”
“More urgency has crept into our market in terms of people wanting to take advantage of more favourable financial conditions before rates start heading upward,” said WinnipegREALTORS® president Claude Davis, “as has already occurred with longer fixed-rate mortgages being recently raised by the major banks.”
Housing types, such as detached bungalows, standard two-storey homes and standard condominiums all experienced year-over-year average price increases from as small as a few per cent to almost 25 per cent in some Winnipeg areas, according to the survey.
Detached bungalows increased 4.2 per cent in Charleswood, rising from an average of $240,000 to $250,000. The increase was 18.8 per cent from $229,000 to $272,000 in River Heights.
Standard two-storey homes increased 4.3 per cent in River Heights from $287,750 to $300,000. In Westwood, the increase was 24.7 per cent, rising from $223,000 to $278,000. Standard condominiums rose 1.7 per cent, increasing from $141,000 to $143,400 in Westwood, while South St. Vital experienced a 20.4 per cent rise from $140,000 to $168,600.
Compared to the last quarter, house prices also increased in almost all areas of the Winnipeg market. Standard two-storey homes were the only exception, with slight decreases occurring in Westwood and in the North East, which dropped from $280,000 to $278,000 and $280,000 to 254,000, respectively. Both locations are entry points into Winnipeg and are more conducive to condos rather than single-family homes.
“Inventory levels are down 6.3 per cent year-over-year,” said Froese. “We had such a mild winter in Winnipeg that potential buyers continued to buy throughout the year. The months of October, November and December all saw double-digit house price increases with multiple offers becoming more common in the market.”
Froese predicts that home prices in Winnipeg will continue to rise through the second quarter of 2010 for most housing types, as long as interest rates remain reasonable and first-time home buyers continue to be active in the market.
The national average price of a detached bungalow in Canada rose 11 per cent to $329,209 in the first quarter year-over-year, while standard two-storey homes rose 10.3 per cent to $365,141 and standard condominiums increased 10.9 per cent to $228,963.
“National averages from our first quarter report are not particularly useful in painting a picture of the country’s neighbourhood real estate stories,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “House sale data from the past two-year period shows tremendous variances in terms of how different cities reacted to the recession.
“In Vancouver and Toronto, for instance, the dramatic unit sales fluctuations exhibit a significant degree of market irrationality — (consumers were) inordinately fearful when faced with poorer markets and (became) overly enthusiastic when the tables turned.
“Montreal is an example of a city where the market has been much more stable and homeowners there seem quite happy with the relatively slow pace of change.”
In addition to strong price appreciation in the first quarter of 2010, the volume of sales in Canada also increased year-over-year as pent-up demand from a constrained supply of homes for sale in 2009, coupled with unseasonably warm weather, prompted a spike in home sales in the country’s largest housing markets up to March.