Serious upward pressure on housing values saw Winnipeg break through the $130,000 average price threshold for the first time, according to a new report.
And, the report said by the end of 2006, home appreciation in Winnipeg is expected to increase another five per cent to an average price of $140,000.
RE/MAX’s Housing Outlook 2006 said, “Winnipeg’s economic engine continued to rattle and hum throughout 2005, stimulating strong housing activity in virtually every segment of the market.”
The outlook said that by the end of the year, the average price is expected to climb 14 per cent to $134,000, “yet another record performance and one of the highest percentage increases in the country ... second only to Victoria and Kelowna (British Columbia).”
According to the outlook, the future for the residential real estate market in Winnipeg looks bright.
“A number of large-scale projects are underway in the city centre,” reported the outlook, “including four waterfront condominiums that combine with retail/commercial space — a $50-million investment in the private sector.”
Canada Mortgage and Housing Corporation also reported that multiple-family construction is underpinning starts in Winnipeg and surrounding municipalities.
“Multiple-family construction continues to maintain a solid pace,” said Dianne Himbeault, CMHC’s senior market analyst for Manitoba, “and this will be the third year in a row where starts have been 600 units.”
To date, there have been 739 multiple-family starts, a 31 per cent increase over the same period ending in October 2004, according to CMHC.
“While a significant portion of the demand for multi-family units this year has come from the seniors’ market, builders and developers have also turned their attention to first-time buyers looking for condominiums and to renters who are unable to find a unit in a market facing low vacancy rates,” Himbeault added.
The RE/MAX outlook said confidence remains high, especially following Manitoba Hydro’s commitment to a new downtown office building now under construction, and CanWest Global’s proposed $40-million, 10-storey office near the corner of Portage and Main.
“An influx of new inventory may ease some of the strain on the marketplace,” according to the outlook, “permitting purchasers the luxury of time in making their moves.
“A greater selection of homes listed for sale will also slow rapid price appreciation experienced throughout the new millennium.”
The Winnipeg Real Estate Board reported that MLS® listings are up by 15 per cent since the start of 2005 when compared to the same period in 2004.
“The sizable increase in our listings this year coupled with strong demand for housing is pushing up our MLS® sales to a year-to-date level that is in reach of eclipsing our best yearly total ever if the market persists,” said WREB president Ruthe Penner.
To date, MLS® sales up to the end of October were up six per cent to 10,698 compared to 10,124 sales by October 2004.
The RE/MAX outlook said interest rates are not expected to factor in heavily next year. In fact, the outlook said any significant one-time increase may spur people into the housing market.
Penner said the recent mortgage rate increase of just a quarter percentage point did spark more activity in the October housing market.
The outlook said a limited supply of high-end product for Winnipeg will have purchasers waiting in the wings in 2006.
“Traditional established areas like Tuxedo, North River Heights and waterfront properties along the banks of the Red and Assiniboine rivers remain popular with upscale purchasers, along with newer areas such as Linden Woods, Whyte Ridge and Pritchard Farm Properties,” according to the report.