The slowdown in September sales figures has been skewed by record sales in past years, according to WinnipegREALTORS® president Shirley Przybyl, rather than indicating that the local market is following what’s occurring in other Canadian cities.
Przybyl said the national market is falling due to the effects of the new federal mortgage regulations, “but we’re not feeling the same impact.
“We still have multiple offers on some homes, some homes are selling for list price and others are selling for under asking price,” she said. “It’s an indication that the market is still strong and diversified.
“And it has to be pointed out that some neighbourhoods will always perform better than others.”
Przybyl said the decline in September sales by 14 per cent, reflects the strong market performance last year.
“It’s hard to compete when you’re up against a record year,” she added, “as well as a decade-long sellers’ market.”
In September 2011, there were 1,214 MLS® sales, while last month there were 1,040 sales.
The drop in sales also resulted in a 10 per cent decrease in MLS® dollar volume to $251 million.
But year-over-year, sales figures are holding steady or making improvements over 2011. From January 1 to September 30, MLS® sales were up by only 17 units, but dollar volume rose by five per cent to $2.55 billion.
“We’re watching the market closely, especially since other markets across the country have been experiencing drops in activity for a few months,” said Przybyl.
Federal Finance Minister Jim Flaherty announced in July that the maximum amortization period for mortgages was to be dropped from 30 years to 25 years.
“Other markets have found that this adjustment negatively impacts first-time buyers and causes demand to weaken,” said Przybyl.
The Canadian Real Estate Association reported that the new regulations are primarily affecting first-time home buyers, who are now finding it difficult to qualify for a mortgage.
Przybyl said she agrees with Canada Mortgage and Housing Corporation, which has said the decline in first-time buyers making home purchases across the nation is a phenomenon that will last just a short period of time and then the market will rebound.
She said first-time buyers are simply delaying their home purchases.
Przybyl pointed out that the local decline was only for one month, and it takes three months or more to establish a trend.
Meanwhile, CMHC reported strong new home and multiple-family construction last month when compared to September 2011.
“Population and employment gains are supporting the demand for new homes in Winnipeg, especially for multiple-family units,” said Dianne Himbeault, CMHC’s senior market analyst for Winnipeg. “This includes the rental market where vacancies remain low, as well as the condominium market where demand is driven by first-time home buyers and empty-nesters looking to make a lifestyle change.”
Single-detached home starts totalled 190 units in September, which was up from 167 units a year earlier. Multiple-family starts totalled 283 units last month, which was substantially more than the 16 starts in September 2011.
Przybyl said there is an upside to the September sales figures.
“With an increase in housing inventory and the potential for reduced demand,” she explained, “maybe buyers will finally get a break from the decade-long sellers’ market and the market itself may realize a little more balance.”