The city’s real estate market breaks new records

House prices in Winnipeg jumped a record 16.3% year over year.

According to a Royal LePage report on Tuesday, this is the biggest increase the real estate company has seen since it started tracking overall prices.

“These records continue to exist,” said Michael Froese, chief broker of Royal LePage Prime Real Estate in Winnipeg.

For the first time ever, an average single-family home costs more than $400,000 — a median of $425,600 — in the city. In the first quarter of 2021, the same type of house had an average price of $382,000.

The average condo in Winnipeg has gone from $225,000 in the first quarter of last year to $243,900 currently, an increase of 8.4%.

“We didn’t expect (buying) to be as intense as in the first quarter,” Froese said.

March set a new record due to the bidding wars: 67% of homes, or more than two-thirds, sold above the list price. That’s a 14% increase from March 2021, according to Royal LePage’s recent report.

Overall, an average home in Winnipeg costs $387,900, up 16.3% from $333,500 in the first quarter of 2021.

“Demand hasn’t gone away and supply can’t keep up,” Froese said. “Real estate is a huge industry, and it’s an industry that doesn’t change overnight…You don’t build a house in a day.”

Material supply chain backlogs and labor issues continue to slow homebuilding progress, said Lanny McInnes, president of the Manitoba Home Builders’ Association.

Before the pandemic, building a single-family home could take nine to 10 months, McInnes said. Now the same place could take over a year to complete.

<p>JOHN WOODS / WINNIPEG FREE PRESS</p>
<p>Michael Froese, chief broker for Royal LePage Prime Real Estate in Winnipeg, said the 700-square-foot, two-bedroom bungalow behind him on Leighton Avenue had multiple offers and sold above asking price. </p>
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<p>JOHN WOODS / FREE WINNIPEG PRESS</p>
<p>Michael Froese, chief broker for Royal LePage Prime Real Estate in Winnipeg, said the 700-square-foot two-bedroom bungalow behind him on Leighton Avenue had multiple offers and sold above of the asking price. </p>
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<p>“That still doesn’t deter people from building,” McInnes noted. “(We’re) supposed to stay very stable throughout the year.” </p>
<p>The association’s most recent forecast indicates that Manitoba will see about 7,700 new homes built this year, but that number could be pushed up, McInnes said. That’s up from the 10-year average of 6,693 construction sites per year, but below the more than 8,000 that started in 2021. </p>
<p>Prices are unlikely to fall, at least in the short term, Froese said. </p>
<p>“Any price drop will be soft,” he said. </p>
<p>He hopes more Winnipeggers will put their homes on the market in the spring (a typically busy real estate season). More supply is needed to halt the price spike, he said. </p>
<p>Last Wednesday, the Bank of Canada raised its key interest rate by 0.5% to a total of 1%, making mortgages harder to obtain. Even so, the measure won’t dampen demand right away, Froese said. </p>
<p>“Rising interest rates could … push some people out of the market, but not enough to have a major impact on prices,” Froese said. </p>
<p>Instead, it could cause some buyers who qualified for mortgages with interest rates before the rise to buy homes sooner. Some have a window where they can still access the low-interest mortgage, but they must purchase a place within a maximum of 120 days, depending on their agreement, Froese said. </p>
<p>“It speeds up (the purchase) in the immediate term, because now people have a deadline,” he said. </p>
<p>Plus, house-hunting customers might not be deterred by the higher interest rate. </p>
<p>“Maybe they’ll cut back elsewhere,” Froese said, listing travel, renovations and nights out as places to cut spending. </p>
<p>In its last budget, Ottawa announced that it would devote $10 billion to housing. </p>
<p>“It can’t come fast enough,” Froese said, adding that he doesn’t expect the funding to change house prices in the near term. </p>
<p>Royal LePage predicts the average home in Winnipeg will hit $385,800 by the end of the year, up 8% from 2021. Measures such as interest rate hikes and increased supply are expected to slow real estate fervor, Froese said. </p>
<p>“With rising prices, Winnipeg continues to stand out…moderate growth,” Froese said. “It may not be, but we are looking at other parts of the country… We are still (well) positioned for the rest of the year.” </p>
<p>The national average home price climbed 25.1% above its average for the first quarter of last year, according to the Royal LePage report released Tuesday. The national average price was $856,900. </p>
<p>“Across Canada, the issue of housing affordability has become very complicated,” said Jino Distasio, a geography professor at the University of Winnipeg who studies housing and homelessness. </p>
<p>The working class of the working poor is growing, including in Winnipeg, Distasio said. </p>
<p>“A $400,000 house – we’re talking about needing an income of maybe $80,000 to $100,000 to really get a big boost and sometimes afford the average house price,” said Distasio. </p>
<p>People with low-paying jobs — between $50,000 and $60,000 — might not be able to afford homes in places they might be pre-pandemic, Distasio said. </p>
<p>“Property in Canada is becoming more elusive… than we’ve seen before,” he said. “Even… rent of $1,500 to $2,000 a month just seems unheard of in Winnipeg.” </p>
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Manitobans could stay in rental units longer than they would like due to rising housing prices, he added.

“We need to raise the benchmark for building real affordable housing for our lowest income households,” Distasio said. “The whole notion of what we mean by affordable housing has changed over the past five years to include a wider range of low and moderate incomes.

Manitoba has 33,168 social and affordable housing units, according to a report by Canada Mortgage and Housing Corporation released last November.

Of these, there were 359 vacancies. Only Prince Edward Island, Newfoundland and Yukon had fewer job vacancies (Nunavut had no data).

The majority of Manitoba’s units — 27,274 — were built between 1970 and 1989. Only 3,608 were built in 1990 or later. A two-bedroom averages $872, according to the November report.

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