By Todd Lewys
If you were to use one word
to describe Manitoba’s real estate market in 2018, it would be turbulent.
With home buyers rocked by a
trio of factors, the market slowed down, leading to lower-than-predicted sales
performance in several key areas, said WinnipegREALTORS® MLS Market Analyst,
Peter Squire.
“Of all the different
factors that affected the market — rising interest rates, impact fees and of
course, the federal government’s stress test — the stress test had the greatest
impact. However, although 2018 sales figures were down, they were still ahead
of the 10-year average.”
Still, while they were far
from disastrous, 2018 figures were somewhat sobering: home sales were down 4.7
per cent from 2017, while condo prices dropped by 2.4 per cent.
Meanwhile, total MLS dollar
volume dropped by four per cent.
However, as Squire noted,
sales figures were still ahead of the 10-year average.
Total MLS dollar volume was
$3,774,372, 462 in 2018, as compared to $3,921,016,014 in 2017 — not a huge
drop.
And while last year’s home
sales went down to 9,287 from 9,741 in 2017 — condominium prices also dropped
by $5,771 — home prices increased to $321,945 in 2018, an increase of $6,229
over 2017.
The upshot of all of this is
that the province’s real estate market remained steady despite being challenged
on multiple fronts.
Squire said that while those
challenging factors are still present, home buyers look to be adjusting —
something that’s been suggested by solid home sales in January.
At the same time, the
commercial market is also performing well across the board.
Like the residential market,
it’s benefitting from the province’s steady, diversified economy, which is
being bolstered by steady immigration and strong employment.
Consequently, Squire is
cautiously optimistic about 2019.
“My forecast is for home
sales to go up zero to three per cent, home prices to increase by zero to two
per cent, condo prices to decrease by two to zero percent — and for total MLS®
dollar volume to increase by zero to two per cent,” he said. “A good start in
January isn’t necessarily a predictor for how things will go during the rest of
the year, but I believe 2019 will be a better year than 2018.”
He added that — as in the
past — Manitoba’s real estate market will remain steady to due to several
enduring factors.
“The economy is stable,
population growth is steady, Winnipeg’s metropolitan region is growing, and
housing remains affordable,” said Squire. “Those factors should continue to
offset external factors like NAFTA, (rising) interest rates and the mortgage
stress test.”
That said, keynote speaker
Benjamin Tal — Deputy Chief Economist with CIBC World Markets Inc. — noted that
external forces such as economic uncertainty in Europe (BREXIT), China’s bid
for technological and economic dominance, a potential U.S. — China trade war —
and decisions made by The Fed and the Bank of Canada on interest rates — are
going to make for interesting times.
And then there’s the vexing
mortgage stress test to contend with, like it or not.
“Winnipeg doesn’t need such
harsh medicine,” said Tal. “Certain markets should be left alone, and Winnipeg
is one of them.”
He suggested that the
federal government take a less rigid approach to administering the stress test,
a move that would make it more reasonable.
“Why does it need to be 200
basis points? They should make it more flexible and adjustable so it can be
applied better to different markets. Damage to the country has been
significant, so they need to look at making the stress test more flexible.”
Despite all the turbulence
surrounding real estate transactions, those in the market for a home in
Winnipeg and surrounding areas should be encouraged.
With a good supply of homes
and affordable home prices, there’s a home for everyone — now, and well into
the foreseeable future.
Thanks to a strong economy,
resilient, hard-working Manitobans — and the ongoing efforts of dedicated
REALTORS® — Manitoba’s real estate market figures to remain the shining star
among markets in Canada.
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