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'We're still firing on all cylinders'

Resale-homes sales remain hot in Winnipeg

By: Murray McNeill

Friday, Sep. 7, 2012 at 8:48 AM | Comments: 0

The big chill has descended on other Canadian cities, but they're still barely feeling a draft in Winnipeg's red-hot resale-homes market, new sales data show.

While cities such as Vancouver, Toronto and Edmonton were being hit with year-over-year Multiple Listing Service (MLS) sales declines of 30.7 per cent, 12.5 per cent and 10.7 per cent last month respectively, Winnipeg's sales fell by less than four per cent to 1,241 units from 1,290 a year earlier.

And August 2011 was the second-best August in more than a century for MLS sales in Winnipeg, falling just shy of the all-time record of 1,293 units set in 2005.

"I think we're still firing on all cylinders," Peter Squire, residential market analyst for WinnipegRealtors, said.

"If we have learned anything from what has happened in Winnipeg over the last few years, it is one resilient housing market that continues to perform remarkably well," said WR president Shirley Przybyl. "We are bucking a national trend which points to moderating local real estate markets."

Przybyl and Squire said three consecutive months of slightly lower year-over-year sales don't constitute a market slowdown because 2011 was one of the best years on record for MLS sales in Winnipeg. And the third quarter of last year was especially strong.

They also noted that despite the recent declines, sales still ran two per cent ahead of last year's pace after the first eight months of 2012 -- 9,387 versus 9,196.

And not only is the year-to-date dollar volume running seven per cent ahead of last year's pace -- $2.3 billion versus $2.14 billion -- but last month's total of $298.7 million set a new record for August. The previous high was $296.6 million set in August of last year.

The two said there were also other signs last month that there's still plenty of life left in the Winnipeg market.

Single detached homes were still selling almost as quickly as a year ago -- in an average of 29 days versus 28.

Forty-six per cent of the single-family homes that changed hands also sold for above list price, compared with 47 per cent in August 2011. There was only a slight decline in the number of new listings hitting the market -- 1,746 versus 1,784.

Squire said 36 per cent of the inventory of available homes also turned over last month in spite of the influx of new listings. "That's another indicator of a healthy market."

In a report released Thursday, TD Bank said tighter mortgage rules introduced this summer should do the job of cooling Canada's hot housing market in the short term. But higher interest rates are what's needed to return the market to saner levels, it added.

Its chief economist, Craig Alexander, said the rule changes that went into effect in July should shave about five percentage points off sales in Canada, and cut prices by three per cent on average during the second half of this year and in early 2013.

And over the next three years, he expects the combination of the tighter lending rules and anticipated modest increases in interest rates will result in a 10 per cent price correction on homes.

On July 9, Finance Minister Jim Flaherty reduced the amortization rate on new insured mortgages to 25 years from 30, bringing the maximum period for paying off a home back to the historic level. It was the fourth time Flaherty had tightened mortgage rules in as many years, incrementally dropping the amortization period from the high-water mark of 40 years.

murray.mcneill@freepress.mb.ca

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