After a disappointing April, MLS® sales rebounded last month

MLS® activity in May dramatically rebounded from a disappointing April that was marred by flood concerns, according to statistics released by WinnipegREALTORS®.
WinnipegREALTORS® president Ralph Fyfe said flood-related concerns in the early spring held back activity until May, during what is normally the busiest time of the year for MLS® activity.
Not only did May record the highest dollar volume for any month in the 108-year history of WinnipegREALTORS®, but sales and new listings outperformed the same month last year.
May MLS® dollar volume sales rose seven per cent to $350 million when compared to May 2010, while sales increased by five per cent to 1,463 units sold.
The increase in dollar volume was helped by the sale of three $1-million-plus homes, with two sales occurring in East St. Paul and the other in The Oaks, a new development just outside the Perimeter in West Winnipeg.
In addition, a two-acre vacant commercial property near the airport sold for over $1.6 million.
Fyfe said new listings entering the market improved in May, but there remains an ongoing issue of a tight supply of homes available on the market in the two most active residential-detached price ranges from $150,000 to $199,999 and $200,000 to $249,000. Listings in both price ranges were down from last year.
If no new listings are added in these price ranges, the inventory available to home buyers could run out by the end of June, added Fyfe.
“Another major concern remains the fall-off in first-time buyer activity relative to the same month last year,” said Fyfe.
“This pattern, or trend, has emerged over the last few years as house prices have continued to climb. Residential-detached sales under $250,000, the common entry point for first-time buyers,  were down 15 per cent in comparison to May 2010.”
Fyfe said housing affordability at the lower end of the market has been adversely affected by the provincial government’s land transfer tax (LTT).
First-time home buyers are experiencing difficulties in coming up with a down payment as well as the addition of the LTT to closing costs, Fyfe added. 
“It really is time for the province to give serious consideration to offering a first-time buyers exception on the land transfer tax,” he said. “Ontario and B.C. have had one in place for years.”
One reason the LTT is so punitive is that the government has never indexed it to reflect  home price increases since its implementation. Instead, the government in 2004 increased the highest tax percentage levied from 1.5 per cent to two per cent for any dollar amount over $200,000. As a result, for every $50,000 in property value above $200,000, the government collects an additional $1,000.
WinnipegREALTORS® and the Manitoba Real Estate Association are joining forces to bring public attention to the unfair LTT. A new television commercial produced by City TV is scheduled to run this summer and in September just prior to the October 4 provincial election. The commercial will be unveiled on a dedicated LTT campaign Facebook page  entitled, Manitoba’s Land Transfer Tax is Too Much.