A recently-released report showed strong year-over-year price appreciation for detached bungalows and standard condominiums in Winnipeg.
According to the Royal LePage House Price Survey and Market Survey Forecast, standard two-storey home prices also posted healthy year-over-year gains.
“Prices are up due to strong demand and a supply shortage,” said Rick Preston, broker and owner of Royal LePage Dynamic Real Estate, and a former president of WinnipegREALTORS®.
Average detached bungalow prices in Winnipeg climbed 9.9 per cent year-over-year to $304,157, while standard condominium prices grew 8.3 per cent to $192,062. Standard two-storey homes increased 4.7 per cent year-over-year to $320,226.
“To finish as well as we did, with a new dollar volume record of $3.2 billion in MLS® sales, given the tighter mortgage regulations and the regular media calls for a softer real estate market,” said out-going WinnipegREALTORS® president Shirley Przybyl, “is testimony to the resiliency of the greater Winnipeg real estate market and our Manitoba economy in general.”
Royal LePage is forecasting that average Winnipeg home prices will rise over one per cent in 2013, while unit sales for this year are forecast to decrease by 1.2 per cent over 2012 levels.
Compared to 2012, fewer homes are expected to trade hands in the first half of 2013, which should slow the pace at which home prices are rising. However, by the end of 2013, it is expected that the average national home price will be one per cent higher compared to 2012.
In the fourth quarter, standard two-storey homes rose four per cent year-over-year to $390,444, while detached bungalows increased 3.6 per cent to $356,790. National average prices for standard condominiums increased two per cent to $239,374.
“More home buyers moved to the sidelines as 2012 progressed, as economic uncertainty abroad and reduced affordability became a drag on the market, however, house prices proved resilient,” said Phil Soper, president and chief executive of Royal LePage.
“Our sturdy domestic economy and encouraging employment trends have emboldened sellers, and some have opted to let market conditions adjust before listing,” he added. “Simply put, fewer homeowners listed their properties in the second half of the year, which kept inventory levels lower, and supported home values.”
Soper said that in the absence of a serious economic event, many Canadians would adjust their short-term buying or selling timing according to prevailing market conditions, but that it was rare for engaged, qualified families to hold out for very long.
It is expected that the trend towards slower sales seen in the second half of 2012 will continue through the first half of 2013. Expectations are that year-over-year comparisons will begin to show improvement in the third quarter 2013, and return to growth in the final quarter of the year.
Soper said that the housing market is well into a cyclical correction and that fears of a sharp or drawn out collapse are unwarranted. Home prices have risen faster than salaries and wages for three years and the market requires time to adjust.
A CIBC World Markets report also concluded that Canada is not on the cusp of a real estate meltdown.
Benamin Tal, a CIBC economist, said in a recent report that consumer fundamentals in Winnipeg “are in good shape with a relatively healthy labour market and the nation’s lowest personal bankruptcy rate.”
(See NO MELTDOWN, page 7)