By Todd Lewys
It’s a story that never grows old.
Thanks in part to Manitoba’s diversified – and, hence, steady economy – MLS market performance both inside and outside the city remained strong in 2017.
That solid – if not spectacular – performance happened despite some stern challenges, said WinnipegREALTORS’ MLS Market Analyst, Peter Squire.
“All in all, 2017 was an amazing year given some of the challenges (rising interest rates, the stringent stress test imposed by the federal government),” said Squire at WinnipegREALTORS 12th Annual Forecast Breakfast, held Feb. 7 at Canad Inns Polo Park. “Sales were better than expected. In fact, they nearly equaled our best year (2016).”
Much like Manitoba’s balanced economy (with its 16 different sectors), different sectors in the local MLS market balanced each other out.
“While residential detached sales were down a bit – they were affected by the stress test (yet sales ranked third-best all-time) – sales of residential attached homes and condos were up. We had a very good year in the condo market, with 1,789 sales in 2017,” said Squire.
Most importantly, Winnipeg will continue to rank as one of the most affordable places to buy a home in Canada.
“At any average price of $315,720, Winnipeg is amongst the lowest prices in the country,” he said, noting that only St. John’s, Newfoundland, came in lower at $303,713. “You don’t see many other markets like this. Homes here are still very affordable.”
The 2018 forecast is looking very good, added Squire.
“Population growth isn’t expected to slow down, our population is getting younger and more well-educated, business optimism is still high, and we still have more affordable options – those are all positive signs for our market. Of course, there are concerns over the possibility of higher interest rates and the effect NAFTA will have on our economy.”
That said, it should be steady as it goes for Manitoba’s 2018 MLS Market, which should remain in balanced mode.
“I’m looking for home sales to be minus four to zero per cent, home prices to go up from zero to three per cent, condo prices to be in the minus to and two per cent range and total MLS dollar volume to be up zero to three percent,” continued Squire. “I’m expecting 2018 to be one of our best years.”
Meanwhile, the story figures to be the same with commercial real estate sales, said WinnipegREALTORS’ commercial division chair, Trevor Clay.
“Vacancies are low in the industrial and retail sectors (under eight per cent, seven per cent) the investment market has been strong (examples include 190 Smith Street, Allied Portfolio, 1100 Waverley and Dakota Park Plaza),” he said. “The only risk on the horizon is the possibility of higher interest rates.”
A commercial panel comprised of Sasa Radulovic (architect, 5468796 Architecture), Paul Jordan (CEO, The Forks North Portage Partnership), Angela Mathieson (President & CEO, CentreVenture Development Corporation) and Tom Janzen (Associate, Scatliff+Miller+Murray Inc.) was also optimistic about the future of downtown Winnipeg.
“We’re pleased to be part of its development,” Mathieson said. “I believe projects like True North Square are really going to enliven the area.”
Guest speaker Will Dunning – Economic Consultant and Chief Economist for Mortgage Professionals of Canada – ended the event by analyzing the impact of “macroprudential mortgage regulations” and the Stress Test.
“Mortgage regulations seem to be influenced by the heat in Toronto and Vancouver. The rest of Canada wonders why it should be included,” he said. “Preventing movement to home ownership hurts renters.”
Next came the controversial Stress Test.
“Use of an excessive interest rate on top of higher interest rates could reduce housing activity by 12 to 15 per cent (80,000 to 100,000 per year) and cost up to 150,000 jobs,” he warned.
As for Winnipeg? No surprise – a steady, stable market highlighted by affordability.
“Affordability will still be a positive thing, though not as positive as it was a year or two ago (due to higher interest rates and the stress test),” said Dunning.