New WinnipegREALTORS® president David Powell said the housing market will “see strong growth” this year, especially condominium sales, which were on an upswing by the end of last year.
“There is a great diversity of condominiums that buyers can select from — luxury to entry level,” said the president and owner of Powell Property Group.
“For first-time buyers, it’s a springboard to the housing market,” Powell added.
“Condos are a great starting point to build an equity position, which is a lot easier as the market continues to appreciate in value.”
Although single-family detached homes still make up the lion’s share of the housing market — 72 per cent of the MLS® market vs. 14 per cent for condos in 2013 — condo sales last year grew by 13 per cent over the previous year.
In fact, 1,757 condos sold in 2013, which established a new record.
In 2007, condominium sales only represented 10.7 per cent of the total MLS® market.
In addition, the average condominium price in 2013 increased by nearly nine per cent, while the average price of detached homes rose by just five per cent when compared to 2012.
“Condominiums are an affordable option for first-time buyers,” added Powell.
But Powell noted that the condo market is not just confined to first-time buyers. Snow birds and empty-nesters are taking advantage of the diverse condominium market.
For these groups, he added, their lifestyles are more conducive to condo living.
Powell said snow birds and empty-nesters are also taking advantage of the luxury condo market.
With new condo construction, buyers put down a five per cent deposit. “With the possession date from one year to two years away, it away gives them time to sell their existing property,” added Powell. “People also have built up an equity position by the time they take possession.”
With the increasing growth foreseen for the condo market, WinnipegREALTORS® is projecting a six to nine per cent increase in the average price of condos for 2014.
Although first-time buyers may be opting in many cases to purchase entry-level condos, Powell said, “house prices are still very attractive to first-time home buyers.”
The reason is that the local market is becoming more balanced, which is a trend expected to continue that was first witnessed in 2013.
“There’s a good inventory of homes available to buyers,” said Powell, who has been a REALTOR® since 1990 and a broker/owner for 17 years.
By the end of last year, listings entered on the MLS® system were 18 per cent over the 10-year average.
According to the January market statistics released by WinnipegREALTORS®, new listings continue to show strength in 2014 into January with a seven per cent increase over 2013 and a higher percentage increase relative to previous years for January.
January MLS® unit sales were down eight per cent, but the condo market jumped an impressive 36 per cent from January 2013.
“Given some rather harsh weather conditions, it doesn’t surprise me to see home sales were more impacted than condominiums,” said Powell. “The fact remains that vendors were keen to put their properties on MLS® in January, so it will enhance the choice potential buyers have as they look to take advantage of a greater supply of listings in February.
“As we said at our annual forecast breakfast in January,” he added, “the fundamentals are in place for another solid year of MLS® sales and dollar activity.
“Mortgage rates remain at near historic lows and Winnipeg has some of the most affordable prices in the nation for a major city.”
Powell said WinnipegREALTORS® is committed to working toward enhancing affordability for first-time home buyers. The association will continue lobbying the provincial government to create an exception for such buyers from the land transfer tax, which is at two per cent of the cost of a home above $200,000.
“In terms of the land transfer tax, there will be constant pressure from our side to have the government place changes to their regulations on the front burner,” he added.