In last week’s column, the focus was on national housing price trends and how housing has paid off handsomely for those who purchased a home five or 10 years ago.
This week, we’re focusing on the effect of the upward swing in average sale prices in specific MLS® areas of the city.
Winnipeggers are becoming familiar with price increases in the local MLS® market. Last year’s prices were in the double-digit range and 2004 is also posting double-digit increases, even during the summer months when things traditionally tend to slow down. And, there is no sign of a let-up in the consecutive monthly dollar volume increases when compared to the same period last year.
So, what has happened to our local MLS® single-family house prices over the past 10 years and in the last five years?
In 1994, the average residential-detached sale price was $83,000; 1999 saw an increase of close to $ 11,000 to $93,990 (based on first six months of MLS® sales activity in 1999); and as of the first six months of 2004, the average sale price is at $ 127,889.
In percentage terms, this means house prices in the Winnipeg MLS® market have increased on average 54 per cent in 10 years and 36 per cent in five years.
The condominium market has even performed better — a 63 per cent increase in condo prices over 10 years and a 47 per cent increase over five years.
As was pointed out in last week’s column that included a reprint of a Canadian Real Estate Association news release, in the majority of cases, these percentage increases can be much higher to the individual purchaser of a home who is only putting a down payment on a home, not purchasing it outright with their own money.
One example cited was a $10,000 down payment on a $ 100,000 home. If the home then sold for $ 110,000, the purchaser is receiving a 100-per-cent return on their initial investment since net cash-in-hand is $20,000.
While Winnipeg has not done as well as some other markets across the country, the return on investment is still very respectable.
If you look at some specific MLS® areas over the past five years, some have had excellent percentage increases. For instance, the heart of the North End which is up 101 per cent and the West End (MLS® area east of Alverstone to Balmoral and south to include West Broadway) had the highest increase of all WREB MLS® areas at 119 per cent.
On the other end of the scale, River West Park, an MLS® area in Charleswood north of Roblin Boulevard, is up three per cent; and a small rural MLS® area, which includes the towns of Richer and St. Anne, is only up one per cent.
The accompanying chart chronicles a number of MLS® areas that have had above WREB average sale price increases over the past five years. The comparison is based on the first six months of residential-detached sales activity in 2004 and the same period in 1999.