By Peter Squire
Manitoba’s population continues to grow while our supply of housing continues to lag. Along with the increased desire for homes that was only aggravated by the pandemic, a perfect storm of high demand and low inventory has been created, underscoring the need to build more housing to meet this growing need.
New homes on MLS® are not anywhere near as plentiful as older resale homes, but they certainly are featured and marketed on the Winnipeg Regional Real Estate Board’s (WRREB) Multiple Listing Service (MLS®) throughout the entire market region, be it inside Winnipeg or in many of the regional areas located outside the city.
In reviewing the market statistics for this past February, approximately 13% of residential sold properties were new with about 11% for condominiums. If you factor in that the WRREB’s MLS® has been very successful in the last few years marketing and selling vacant land listings — they increased 34% in 2021 to over 1,100 sales — this indicates that there’s a lot of buyer intention to build new in the offing. Most of these vacant lots are outside Winnipeg as there just are not that many listed inside the city compared to outside. In February, for example, of the 51 lots sold, only two out of the 53 sales were within Winnipeg.
Nevertheless, as can be seen from this year’s Parade of Homes — which the WRREB is proud to market on its electronic billboard outside its office at 1240 Portage Avenue — there are over 100 new homes to tour this year. There are many Winnipeg and surrounding area locations to go check out and see what exciting new features can be found in these brand new homes, condominiums and townhomes on display.
Much has been said nationally and even locally about the need for more inventory. The pandemic created unprecedented demand for housing starting in 2020 and it has been unabated ever since. The MLS® inventory has been depleted from one of being balanced to a seller’s market where many neighbourhoods do not have enough listings to meet existing demand.
Looking back at February, many neighbourhoods at the end of that month had few listings for sale. For single-family, many MLS® areas are in the single digits with a number showing only one listing heading into March. Condos are similar, but then we do not expect as many listings given their total market share on MLS® is far lower than single-family. In 2021, there were 14,735 single-family listings entered on MLS® versus 3,610 condos.
Total MLS® inventory of 1,822 listings at the end of February works out to fewer than 2 months of supply based on existing sales when we should have at least twice that to get to a more balanced market. Seller’s market conditions are more pronounced with single-family, with closer to one month of listings available in March.
It is an understatement to say more listings need to come onto the market this spring to serve an undersupplied housing market which is presently experiencing a real supply/demand imbalance — an imbalance that is causing higher prices that have never been seen before. The average single-family or residential-detached sales price in February was $429,000, when the annual average sale price was just under $380,000 in 2021.
This makes it even more important for homebuilders to ramp up their new construction activity to help address the ongoing housing shortage. The Manitoba Home Builders’ Association (MHBA) and the Urban Development Institute of Manitoba are actively engaged with the City of Winnipeg to move ahead on the development and implementation of a much-needed strategic infrastructure plan to service future population growth. In addition, they want to maintain and see improvement in the processing of permits and inspections to enable their builders to add new housing supply to meet current demand in a timely manner.
“Proper planning for every type of land development in Winnipeg depends on a strategic infrastructure plan,” said MHBA’s President & CEO Lanny McInnes “Without it, planners and developers will continue to ‘guess’ on the potential of development sites and on Winnipeg’s overall supply of serviced and serviceable land.
It is worth mentioning that a new home purchase often creates a new home listing, a dynamic that helps support the housing continuum since by adding to the housing stock you free up other housing for purchase.
A report by Scotia Bank in January 2022 indicates provinces like Manitoba have an under-supply of housing for its population. Manitoba has one of the lowest numbers of homes per capita in the country, so building new housing supply will be critical now and moving forward as Canada welcomes an additional 1.3 million immigrants in the next 3 years.
Looking at Canada Mortgage and Housing Corporation’s (CMHC) Manitoba housing starts and completions stats for January, they are off to a slow start compared to January 2021 — though single dwelling housing is ahead of last year. The MLS® market has not been as brisk as 2021, either, so we will watch things closely as we head into spring.
Speaking of spring, the MHBA Parade of Homes is one of the earliest signs, despite the current weather we are experiencing as we enter March. MHBA kicked off their Spring Parade this past weekend, and it runs until March 20, so you still have plenty of time to check out some of the best our builders have to offer.
As McInnes is proud to say, Manitoba’s Parade of Homes is the largest and best one in Canada. It also showcases the best in design and construction, which should motivate you to go and check out this event.
“This year’s Spring Parade of Homes truly has something for everyone,” McInnes said in a recent Winnipeg Free Press column. “One hundred homes, single-family detached homes, condominiums and townhouses, are on display. Twenty-eight different home builders will be presenting their new homes in 24 different communities in and around Winnipeg and in Brandon. If you’re looking at building a new home, this is the best opportunity to see the widest variety of new home options, floor plans, designs, materials, as well as visit Manitoba’s newest developments and communities to see what options are right for you.”
A copy of the Parade of Homes magazine can be picked up at any Steinbach Credit Union, but you can also visit MHBA’s Parade of Homes page at homebuilders.mb.ca for all the information you require including how to contact the builder participants.
If you’re considering buying a new home, plan to attend this event. Over and above the new homes you will tour, it will also give you a chance to see some of the new neighbourhoods and new phases in existing neighbourhoods that are springing up to accommodate Manitoba’s growing population.
Peter Squire is the Winnipeg Regional Real Estate Board’s Vice-President, External Relations & Market