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Manitoba’s booming economy factor in keeping housing market buoyant
Oct 22, 2010
A new report says Manitoba and Winnipeg housing sales are being fuelled by a strong provincial economy and a tight rental market.
The recently-released Royal LePage House Price Survey showed strong year-over-year price increases for Winnipeg homes, but also revealed signs of a softening market.
“Overall, our market continues to remain strong,” said John Froese, broker, Royal LePage Prime Real Estate. “We had a great spring and have done well over the last couple of years during the downturn, but our third-quarter results show a slowdown in the market.”
In the third quarter, year-over-year house prices rose for all housing types surveyed in Winnipeg. Standard condominiums posted the largest increases, rising 11.7 per cent to $163,857, while detached bungalows were up 9.2 per cent to $263,125. Prices for standard two-storey homes rose eight per cent year-over-year to $287,188.  
However, the survey also revealed a slight decline in year-over-year unit sales and an increase in inventory levels, with inventory expected to rise further as 2010 closes out.
“Sales are down slightly and listings are up, yet prices continue to rise year-over-year,” said Froese. “It's because Manitoba's booming economy is attracting immigration into both Winnipeg and elsewhere in the province, making the rental market very tight and pushing the first-time home buyer market up.  
“However, Winnipeg is also a very seasonal real estate market, so look for sales to decrease and inventories to rise as we head into the winter months,” he added. “Having said that, the unseasonably pleasant fall weather we enjoyed helped keep the market strong in the third quarter.”
Nationally, Canada's residential real estate market saw year-over-year growth in the third quarter as fears of a double-dip recession or a housing bubble faded. House price appreciation slowed to a more modest five per cent in the quarter, which is historically typical of balanced real estate markets.
“Most Canadian housing markets cooled in the third quarter,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “In fact, the year is unfolding much as we predicted, with the unusually active first half of 2010 giving way to slower markets in the later part of the year.  
“Helped by very low rates in a competitive mortgage financing market, the third quarter was slightly stronger than anticipated on new demand fuelled by improved affordability in many regions. 
“Looking ahead, it is very unlikely that the period from now to year-end can keep pace with the activity levels posted in the overheated market of the final quarter of 2009,” he added.
In the third quarter, the average price of a detached bungalow in Canada was up 4.6 percent to $324,531, compared to a year ago. Over the same period, standard two-storey homes rose 4.4 percent to $360,329 while standard condominiums rose 3.9 percent to $226,481.
“House price growth now sits just below the long-term annual average of approximately five per cent, but once this is adjusted for inflation, which is very low and expected to continue to be that way for some time, appreciation is right on track,” said Soper. “Canadian homeowners will be pleased.”