Cooling down, but conditions are still warm: this is the best way to describe the Winnipeg housing market presently.
The Winnipeg housing market has enjoyed the best of both worlds over the last couple of years. On one hand, housing valuations have been on the rise. On the other, housing affordability remains a characteristic of the Winnipeg housing industry and the broader Manitoba real estate market. It has been a delicate balancing act for buyers and sellers.
But has the booming Winnipeg housing sector peaked? Like much of the Canadian real estate market, Winnipeg is witnessing some moderation, from easing price growth to easing sales activity.
Market analysts agree that the Bank of Canada (BoC) raising interest rates and more supply coming online will be contributing factors to any correction or slowdown in various housing markets throughout the country over the next 12 to 18 months. But is the central bank’s tightening policy crusade and new listings beginning to be felt throughout the city regarding their effects on the housing market?
Winnipeg Housing Market Report
According to the Winnipeg Regional Real Estate Board (WRREB), residential property sales slipped by eight per cent year-over-year in July, totalling 1,542 units. Transactions are also about three per cent above the five-year average.
Winnipeg prices have eased, with the association reporting that MLS® Home Price Index tumbled about five per cent month-over-month in July, to $367,200. However, apartment prices have ostensibly performed better than single-family homes, rising a little more than two per cent, to $234,000.
Year-to-date average prices are also up for both property types, with single-family homes advancing nearly 14 per cent, while condominiums increasing more than eight per cent to $264,000.
The biggest surprise for many real estate professional has been the number of new listings coming to the Winnipeg housing market. Association data show that new residential listings increased at an annualized pace of nine per cent in July, totalling 2,359 units.
“We are seeing once very tight market conditions loosening up in the second half of 2022,” said Akash Bedi, 2022 president of the Winnipeg Regional Real Estate Board, in a statement. “Above list price sales for both single-family homes and condominiums are trending down from what they were earlier in the year. July single-family percentages of above-list-price versus below-list-price sales are the reverse of the year-to-date ones, with below-list-price sales this month at 55 per cent, when they are 35 per cent for the year.”
New housing construction activity has remained robust in 2022 but has been relatively the same. In July, housing starts totalled 471, according to Canada Mortgage and Housing Corporation (CMHC). They have also been relatively the same on a year-to-date basis, clocking in at 3,344 units. By comparison, housing starts were 444 in July 2021 and 3,391 in the first seven months of last year.
Ultimately, the Winnipeg housing market can be summarized as reasonably priced, with waning demand and fresh supply coming on stream.
Is a Cool-down Needed?
Winnipeg market observers purport that this cool-down is necessary to sustain a healthy market, especially following significant gains during the COVID boom. In other words, the Winnipeg housing market could be on the path toward balance.
Still, it shows the power rising interest rates are having on today’s environment. Mortgage rates are climbing in lockstep, which means higher monthly mortgage payments. Rising rates also mean that the pool of homebuyers will likely shrink. Conditions are balancing out, so potential sellers can no longer command their suite of terms and conditions.
Moving forward, consumers and their real estate professionals will need to stay on top of the recent changes and what they mean for buyers and sellers. Whatever the case may be, the Winnipeg real estate market continues to maintain good affordability status.
“Housing options and choice are signs of a healthy local market, so to see condominiums doing relatively well in comparison to 2021, when sales were up 39 per cent over the best previous year, is very positive,” said Bedi. “On the other hand, sales activity is not faring as well for residential-attached properties, which decreased 32 per cent in July 2022 over July 2021.”
How is the Manitoba Real Estate Market Performing?
The broader Manitoba real estate market is witnessing similar numbers.
In July, residential property sales tumbled 18.8 per cent month-over-month, data from the Manitoba Real Estate Association (MREA) show. The average sales price dropped 6.5 per cent to $353,309. New listings also slumped close to 21 per cent to 2,500 units.
New housing construction activity has steadily risen in the Prairie province in the last couple of years. In July, CMHC numbers show there were 573 housing starts, up from 553 at the same time a year ago. In the first seven months of 2022, housing starts totalled 4,156, up from 3,909 in the same span a year ago.
Winnipeg and the rest of the province remain attractive places to live and work. But the national real estate market correction will impact the Prairies, amid increasing interest rates. In the end, is this a buying opportunity for prospective homeowners?