by Peter Squire
In 2007, the same year WinnipegREALTORS® Association began operating under its new name — with the tagline The tools. The team. The trust. — it also hosted its inaugural forecast event. Next month, we are hosting our 13th Annual Forecast Breakfast.
The genesis of our annual forecast breakfast began the year before in 2006, when I was invited by the
REALTORS® Association of Edmonton (known then as the Edmonton Real Estate Board) to attend their annual forecast event. It was impressive, with high attendance numbers and an excellent line-up of presentations to help Edmonton Realtors understand MLS® sales and pricing activity with respect to their local market. There was a thorough analysis of the year which had just concluded, and of course predictions on how they felt the market might progress in the following year.
Interestingly enough, their forecast from the previous year had not even come close to predicting what turned out to be a bumper crop in sales. Alberta was going through real boom times back then, an entirely different situation from today with all the headwinds it has to contend with on a number of fronts.
Undaunted by what had happened in the high octane Edmonton housing market, WinnipegREALTORS® forged ahead and rolled out its own crystal ball. And so began our annual journey down a road fraught with potential disappointment given all the u-turns which can arise unexpectedly in the real estate market. All markets are local, so it really becomes a matter of diving deep into what forces may be at play in the current Winnipeg Metropolitan Region market to assess
as accurately as possible what might happen in the market next year.
Helping kick-start that first forecast breakfast was keynote speaker Peter Norman, a noted national housing economist at Clayton Research, which was subsequently acquired by the Altus Group. Today, as the chief economist of the Altus Group, Norman still has his hand in the housing market and is a key contributor to the Altus Group Housing Report and Altus Group Housing Forecast.
Norman featured a months-of-inventory chart for WinnipegREALTORS® which showed how house prices spike with lower monthly inventory (creating more of a sellers’ market) and stay flat or even decline when months of inventory rise over 5 months (more of a buyers’ market). The Altus Group Housing Report
always shows a resale housing market indicator, which compares change in unit sales for the same month from year to year, as well as what the months of inventory are. At this point in time, Winnipeg is considered to be in balanced market conditions.
Months of inventory is just one indicator which helps determine where prices may go in any given year. Another indicator that Norman introduced was what he coined the “virtuous cycle” of economic
development. What is powerful about this one is how it shows the different external factors in the economy which can shape outcomes in the resale housing
market — and the economy as a whole.
Last year, at our 12th annual forecast event,
WinnipegREALTORS® welcomed Will Dunning, the chief economist of Mortgage Professionals Canada, to address the attendees. His presentation was well timed, given everyone’s concern over the federal government’s move to introduce a second mortgage stress test on uninsured mortgages. Dunning argued that the stress test, while possessing some merits, was too high at 2 full percentage points above a negotiated 5-year term rate. He is now on record stating that a 0.75 percentage point higher qualifying rate is sufficient to achieve appropriate protection to consumers in the event of further interest rate hikes. Dunning also provided some interesting statistical analysis showing how a specific sales-to-new listings ratio (SNLR) does a good job of explaining price growth in Winnipeg. Higher percentage price increases correlate with higher sales-to-new listings ratios (e.g. 2% when SNLR is 62%).
This year’s 13th Annual Forecast Breakfast will prove to be just as interesting. Our 2019 Winnipeg-
REALTORS® president, Kenneth Clark, will have the opportunity to welcome everyone to another year of real estate activity in which the local market will chart
its own path, with the association’s 1,950 members playing a pivotal role in making that happen.
The keynote speaker is Benjamin Tal, deputy chief economist with CIBC World Markets. Tal is well known for his influential role as a thought leader in Canada, including real estate. He will provide more of a global and national perspective on the year ahead.
WinnipegREALTORS® will also be hosting Manitoba Finance Minister Scott Fielding, who will be presenting an economic and pre-budget update on Manitoba’s progress to improve its finances. And, back by popular demand, is our commercial real estate panel moderated by commercial division chair Kyra Winfield. Winfield is assembling a panel of industry experts to weigh in on what is happening in and outside Winnipeg to move our economy forward. Of course, I will be back again, sharing insights on 2018 and how the MLS® forecast turned out, while looking ahead at how I see 2019 unfolding. This event is open to the public.
The 13th Annual Forecast Breakfast is being held on Wednesday, February 6 at the Victoria Inn. Ticket prices are $50 for members of WinnipegREALTORS® and $60 for non-members.
For more information or to register please visit http://forecastbreakfast.winnipegrealtors.ca
Peter Squire, WinnipegREALTORS® Market Analyst