Important to note that not all markets are similar

by Peter Squire

One of the most obvious regional differences we like to talk about in Canada is our weather. It’s so varied that one wonders how can anyone ever lump together our provinces and territories as one homogenous weather region? Another example of regional differences is economic performance and employment numbers. I think everyone will agree Manitoba’s budget this week is vastly different from what B.C. delivered in February.

So, herein lies a statement that you will continue to hear in order to allay concerns about how the WinnipegREALTORS® housing market is fairing versus housing in the Greater Toronto Area (GTA).  Keep in mind, all markets are local. We do not have a $65 million listing on our MLS® as they now have in Oakville, which is possibly the most expensive listing for a home ever. A 47,000-square-foot mansion with a 12-car garage looking over Lake Ontario is not a reality here, nor can you expect such a listing for some time to come.

This is why we will always advise you to call your REALTOR®, an expert on the local market, since there are even differences occurring within the property types, price ranges and the neighbourhood or area of interest to you.

And if you think this is something WinnipegREALTORS® is adamant about stressing, you are right. However, there’s no better group to demonstrate how different markets are across Canada than the Canadian Real Estate Association (CREA). While Environment Canada or the U.S. National Weather Service forecast weather, CREA reports on resale housing market activity. And if you want to stay with a weather analogy to real estate, patterns do emerge in specific real estate markets that become entrenched and not easily dislodged.

Reinforcing the real estate market differences in the country is amply demonstrated in CREA’s March 15 updated resale housing market release. Here are some excerpts from the release:

“Canadian housing market trends continue to display considerable regional divergence.

“In British Columbia, activity in the Lower Mainland has cooled markedly from all-time highs recorded early last year; however, sales and price pressures elsewhere in the province remain historically strong.

“In the resource-intensive provinces of Alberta, Saskatchewan, and Newfoundland and Labrador, sales activity is still running at lower levels and supply is elevated. This has resulted in weakened price trends for these provinces.

“In housing markets around the Greater Toronto Area and including the furthest reaches of Ontario’s Greater Golden Horseshoe (the region includes the GTA, Hamilton-Burlington, Oakville-Milton, Guelph, Kitchener-Waterloo, Cambridge, Brantford, the Niagara Region, Barrie and nearby cottage country), the balance between supply and demand has become increasingly tight. This is expected to lead to continued double-digit price growth, resulting in further erosion in affordability and sales activity in the absence of a significant and sustained rise in new supply.

“Elsewhere, housing markets in places like Manitoba, Eastern Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island have all experienced, to varying degrees, a breakout year in 2016 following a number of years of stagnation, with rising sales drawing down elevated supply.

“In some regions, the recently tightened ‘stress test’ for mortgage financing qualification will force some first-time buyers to re-think how much home they can afford and may lead to a drop in home purchases as they shop for a lower priced home. In regions where there is a shortage of lower-priced inventory, some sales may be delayed as buyers save longer for a larger down payment.

“In markets like Vancouver and Toronto, where single-family homes are in short supply and there are few affordable options, some buyers may find themselves priced out of the market entirely. In Toronto, the stress test for mortgage qualification may prompt some buyers to move further out into communities located in the Greater Golden Horseshoe where homes are more affordably priced.”

So, there you have it. CREA’s forecast narrative hardly sees Canada as one moving weather pattern and there are clearly pockets of turbulence within it. Manitoba is not one of them.

In Manitoba for 2017, CREA is forecasting a very modest drop of 1.4 per cent in residential market sales activity through the MLS® and the same percentage increase of 1.4 per cent in the average price.