This spring Winnipeg has witnessed a 28 per cent increase in new listings over the same period last year.
Just under 900 new MLS® listings were entered on WinnipegREALTORS® MLS® during the first half of April. This brings the active listings total to over 2,000, the highest it has been at this time of year since 2003.
WinnipegREALTORS® president Darlene Clare said the increase in listings has the potential to create a more balanced market.
When REALTORS® say the “signs they are a-changing,”they are not referring to one economist’s prediction last week that the housing boom is over in Canada.
Quite the contrary! The signs that are changing are MLS® signs as new listings are soon followed by the addition of a “sold” sign.
For the first half of April, houses were on the MLS® market on average for less than three weeks. The most active price range (e.g., $160,000 to $199,999) took less than two weeks to sell.
Locally, the average price was over $200,000 for the second month in a row, although there was still an incredible range in sale prices — the highest home sale was $1,175,000 while the lowest sold for just $11,000.
The Canadian Real Estate Association indicated in March that the MLS® residential average price increased four per cent year-over-year to $329,383. New records for average price were set in a number of major markets, including Saskatoon, Winnipeg, Hamilton-Burlington, Ottawa and Halifax.
While price increases in Winnipeg may continue, local increases are far below the higher prices registered in other major markets.
The Bank of Canada’s recent one-half point lending rate reduction should do nothing to dampen demand in Canada, and certainly not in Winnipeg where the economy is performing well, especially in light of the contraction in the U.S.
Bank rate cut again in April
The Bank of Canada cut its benchmark overnight lending rate one-half of one percentage point to three per cent. It also signaled further cuts in the near future. The trend-setting bank rate, which is set 0.25 percentage points above the overnight lending rate, now stands at 3.25 per cent.
The bank now expects the U.S. economic slowdown to be longer and deeper than previously thought, dampening Canadian exports and economic growth. The bank also forecast weaker domestic investment and consumer spending due to tightening credit conditions and softening sentiment.
The bank repeated earlier statements that the domestic economy will remain robust. “Domestic demand is projected to remain strong, supported by firm commodity prices, high employment levels, and the effect of cumulative easing in monetary policy.”
The bank also marked down its inflation outlook, with inflation forecast to remain below two per cent until 2010. The continuation of low inflation will enable the bank to continue cutting interest rates when it sets those rates again in June.
“In line with this outlook, some further monetary stimulus will likely be required to achieve the inflation target over the medium term,” according to the Bank of Canada.
“The credit crunch and shaky U.S. economic growth will remain a downside risk to Canadian economic growth for some time,” said CREA chief economist Gregory Klump.
“The bank has all but said it will continue lowering interest rates to support economic growth, now that it sees inflation staying below its target rate of two per cent for years.”
When the bank decided to lower interest rates on April 22, the advertised conventional five-year mortgage rate stood at 6.99 per cent. This is less than one half of a percentage point above where it stood a year ago. Competition among mortgage lenders remains stiff, but discounts off advertised mortgage interest rates have shrunk because the U.S. sub-prime mortgage meltdown and resulting global credit crunch have raised banks’ cost of funds.
“National sales activity will stay strong and prices will continue rising. Housing affordability and Canadian housing demand will benefit from additional interest rate cuts,” Klump added.
Contact a REALTOR® to get up-to-date facts and statistics on the current real estate market. They know the market and will achieve maximum exposure for your property by listing it on MLS®.