Brandon real estate sees “Slow, Steady” growth

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This article was published 28/10/2024 (342 days ago), so information in it may no longer be current.

Brandon’s real estate market has grown at a “slow and steady” pace between January and September this year, says Brandon Area Realtor executive officer Michael Barrett.

Barrett told the Sun the city’s housing market has maintained stability, seeing slight increases in property values despite a drop in the number of units sold.

“The local market has been evolving gradually, with specific segments, such as single-family homes, showing consistent activity,” he said in an interview on Friday. “It’s always changing, but Brandon still fits that slow and steady description.”

The total residential sales value for single-family homes in Brandon reached over $128 million year to date (YTD), up by about three per cent from over $124.3 million over the same period last year.

According to Brandon Area Realtors, the average home price increased about 8.7 per cent to over $338,000 from over $311,000, while the total number of units sold dropped about five per cent, from 399 to 379.

Barrett attributed the rise in property values to high demand coupled with limited inventory.

“With higher prices, there’s probably more demand, but less inventory available than there was before and there may be buyers out there who want to buy, and can buy, but just haven’t been able to secure a property,”

“There are certainly more competing offers now on properties, and I think that’s part of it. Interest rates also definitely play a role. Interest rates have been going down consistently for months. As interest rates come down again, there’ll be buyers on the cusp of moving up to the next level, or into the new home market. Even if prices are a bit higher, their monthly cost is lower, which opens up resale houses.”

Barrett observed that while Brandon has benefited from considerable immigration, it has not seen a comparable influx of new industries creating jobs, which he partially attributed to a hydro deficit affecting industries dependent on power.

Although Brandon has strong local businesses, the city lacks large tracts of ready-to-develop land owned by either a single entity or the city itself, he said.

Barrett contrasted Brandon’s situation with cities like Portage, which have successfully attracted companies by offering what he described as a “complete package” that includes available power, a strategic location on a transportation corridor and proximity to Winnipeg and its airport.

“We’re a bit challenged in that way, so we don’t have the same pressure on our market from an incoming industry that could bring 100 families to Brandon,” he added.

Royal LePage, in its latest House Price Survey, found the aggregate price of homes across Canada rose by 1.6 per cent year-over-year, reaching $815,500 in the third quarter of 2024. However, on a quarter-over-quarter basis, the national aggregate home price saw a decline of 1.1 per cent, attributed to sluggish activity in many markets during the summer months.

Notably, sales volumes began to recover in September, with over one-third (38%) of the regional markets surveyed reporting positive aggregate price gains compared to the previous quarter, it stated.

Royal LePage communications director, Anne-Elise Cugliari Allegritti told the Sun there is a “standstill” across parts of Canada’s housing market, as interest rates impact buyer and seller activity.

“In cities like Toronto and Vancouver, which are some of the country’s most expensive markets, buyers are holding off, waiting for expected interest rate cuts from the Bank of Canada,” she said. “We have this buyer mentality of trying to, quote, unquote, time the market.”

While urban centres have seen modest price decreases, sellers are showing little urgency to lower their asking prices, she added, noting an increase in inventory on the market. This, combined with longer listing times, suggests that “sellers are not necessarily in a situation where they are desperate to sell,” Allegritti said.

In contrast, cities in the Prairies, including Calgary, Edmonton, Winnipeg, and Regina, have continued to see strong demand. Despite a seasonal winter slowdown expected, Allegritti indicated there could still be “modest price gains” across these Prairie cities. She pointed out that the demand has “consistently outstripped supply,” offsetting declines seen in other parts of the country.

Regarding future trends, she said, further interest rate cuts could trigger renewed activity across the market, particularly if buyers perceive that prices are starting to rebound.

“As soon as prices start to trend upward, we think that activity is going to just take off,” she said, predicting an early start to the spring market. Buyers looking to avoid potential price increases may rush to buy before interest rates drop further, she suggested.

Allegritti also pointed to the important role newcomers play in Canada’s housing market, adding they typically transition from renting to owning within three to five years.

“We’re inviting many highly educated new Canadians to the country … it stands to reason that they will, even if not immediately, be in a financial position to own real estate,” she said, adding that long-term ownership rates among immigrants often surpass those of Canadian-born residents.

On the rental side, Allegritti highlighted that the recent decline in international student numbers has softened demand, especially in Ontario’s university towns.

She attributed the increase in rental inventory and price moderation partly to the impact of “mom-and-pop” landlords facing negative cash flows due to lower demand. The reduction in international students is “not the only reason,” she explained, “but it’s certainly contributed” to these trends in the rental market.

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