Cooling housing market sees lower demand and prices – Winnipeg Free Press
Home prices in Manitoba could fall nearly 10 per cent by the start of 2023, according to a new forecast from TD Bank.
The National Bank projects that the average Manitoba home will cost around $340,000 early next year, well below the $370,000 in the second quarter of 2022 (and Manitoba’s peak for average home prices).
“Demand is falling in Manitoba in response to rising interest rates, which will put downward pressure on prices,” said Rishi Sondhi, a TD Bank economist and author of the latest Canadian Housing Outlook. institution.
TD Bank released the national report on Monday. It highlighted potential home price declines of up to 25% in major Canadian markets.
Home prices in Manitoba are expected to increase by 3% by the end of 2022, compared to the previous year. That’s a departure from provinces like Ontario, British Columbia and Alberta, where year-over-year price declines are expected.
“Affordability isn’t as tight in Manitoba (as it is in markets like Toronto and Vancouver),” Sondhi said. “(He) can handle the higher interest rates we’re seeing.”
Before the pandemic, house prices in Manitoba were relatively stable. Already, places in Ontario were becoming more expensive.
During the pandemic, house prices in Manitoba have soared, mirroring provinces across the country.
“The starting point is much better, much more favorable from an affordability perspective for Manitoba,” Sondhi said.
The average Manitoba single-family home cost $400,000 last July. Nationally, the average price of a home was $629,971, according to the Canadian Real Estate Association.
“Affordability is not as tight in Manitoba (as markets like Toronto and Vancouver)… (It) can handle the higher interest rates we’re seeing.– Rishi Sondhi
Sondhi does not expect significant increases in Manitoba home prices in the new year. The province’s economic growth has been good so far, but it will likely slow “quite significantly”, he said.
“Inflation is quite high, and it’s eating away at people’s ability to spend on different things,” Sondhi said. “If your money is somehow losing its value, you need to be…more selective about what you spend.”
This includes housing.
“If you don’t have an increase in house sales, that means prices won’t go up as much,” Sondhi said.
It’s been a slower summer than last year for Blake Vasko, a Manitoba realtor.
“Many homes are now on the market for a few more days,” Vasko said.
Often sellers get their asking price or a little lower. Some are still getting multiple offers, but these are outliers, Vasko said.
“They’re not getting 10 offers anymore like they were six and eight months ago,” he said. “They get maybe two or three.”
He attributes the slowdown to more homes on the market and rising interest rates — potential buyers may not qualify for the mortgages they want, Vasko said.
Last year was the first in more than a decade that Manitoba saw an increase of more than 10% in the average price of its home, according to Peter Squire, manager of market intelligence at the Winnipeg Regional Real. Estate Board.
The average single-family home price in May 2022 soared above $454,000 – a high for Manitoba.
“It’s all settling in, what had to happen – it wasn’t sustainable,” Squire said.
The province approached 4,000 active registrations on Tuesday, he said. There was a shortage at the beginning of the year — about 1,800 registrations at one point.
The market isn’t balanced yet, but it’s closer to normal, Squire said.
“I still see us as a stable housing market,” he said, noting that volatility and movement is happening month to month everywhere.
In July, the average prices for townhouses and condos were $323,478 and $271,901, respectively.
In July 2021, the average prices for single-family homes, townhouses and condos were $377,789, $321,334 and $258,770, respectively.
Single-detached home averages have tended to favor purchases of larger, more expensive homes, Squire noted. Last month, the number of minimum purchases of $500,000 decreased, he said.
In July 2019, the average single-family home in Manitoba cost $323,686, more than $70,000 less than last month’s average.
The key province will remain among the most affordable in Canada, even with projected house price declines in markets like Ontario and British Columbia, TD Bank’s Sondhi said.
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