Inherent stability and reliability of local market will continue into 2016

by Todd Lewys

From an economic standpoint, 2015 was a challenging year in Canada.

Yet, Manitoba’s economy held strong in the midst of all the turmoil. And much like the provincial economy, Manitoba’s MLS® market was rock solid. While other markets were experiencing varying levels of upheaval in major cities east and west of Manitoba’s capital, the MLS® market in Winnipeg and its surrounding areas was exceptionally stable.

That didn’t surprise WinnipegREALTORS® 2016 president Stewart Elston. “Our market was characterized as high risk (in a CMHC report released in 2015), but we don’t subscribe to such negativity,” he said in his opening remarks at WinnipegREALTORS®’ 10th annual Forecast Breakfast at Canad Inns Polo Park on January 27. “We have a strong, steady housing market, a market that’s always held its own and been very resilient. I can’t imagine a more stable market.”

Peter Squire, WinnipegREALTORS®’ market analyst, said that the local market’s inherent stability has made it very reliable. “Our MLS® market has been incredibly consistent over the past few years,” he said, “and 2015 was no exception. We recorded our fourth best performance record ever, a great result considering all the challenges our Realtors faced.”

One of those challenges was a perceptible shift in the market from one extreme to another. “Conditions have gone from a tight market (with listings in short supply) to a more balanced, even buyers’ market (with a much higher number of listings) of late,” Squire said. “To say the least, our market was different in 2014 and 2015 compared to previous years.”

That said, the change in market conditions essentially had little effect on how the market performed once all the sales figures were tabulated.

“Our dollar volume has been amazingly consistent,” he said. “In 2015, we set a new annual record with $3.51 billion in sales.”

 At the same time, there’s no denying that the local market has shifted. Average days on market for residential detached homes increased to 33 from 30 in 2014, while condominiums stayed on the market for 49 days in 2015 compared to 40 in 2014.

“Average days on market slowed down in 2015. Overall, it’s really nothing to complain about,” he said. “Over 98 per cent of listings sold for list price, and average price was up about two per cent to just under $294,000. Although condominium sales got off to a slow start — the new condo act was an impediment to sales — 1,615 units were sold, making for our third best year ever.”

Squire added that performance of rural market was a big story in 2015.

“Sales in rural areas were up 25 per cent,” he said. “Affordability played a part in it, as did great housing options in areas such as Oakbank, Dugald and Steinbach.”

Now comes the burning question: Will the market perform to the same strong levels in 2016?

“This year’s forecast is similar to 2015,” said Squire. “I’m projecting for home sales to go up one to three per cent and for home prices to increase by zero to two per cent. As for condominiums, prices figure to increase by zero to two per cent. MLS® dollar volume is projected to increase by one to three per cent.”

Stephen Sherlock, WinnipegREALTORS® Commercial Division Chair, said that despite some challenges — a lack of quality industrial space, and limited Class A options downtown — commercial sales should be solid. “I believe factors such as a tenant shift upward and a better perception of downtown will lead to more development downtown,” he said. “Attractive mortgage rates and an ample supply of mortgage money should make for high activity in the industrial, retail and office sectors.”

Other factors, such as the continued development of CentrePort Canada, will also boost market performance, added Sherlock. “Companies are looking for the development of new (industrial) facilities, and CentrePort will play a big part in providing those new facilities.”

CentrePort Canada’s president and CEO Diane Gray said CentrePort is up to the challenge.

“We have 43 new companies on 250 acres of real estate development (a rail park, residential community and campus/business park), and we expect that development to accelerate over the next five years. It will be exciting to see where we are at the end of that time period,” she added.