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Significant gains in local real estate over past decade
Feb 28, 2008

Pent-up demand, population growth, tight inventory levels, and the longest economic expansion since the Second World War collectively fueled one of the best decades on record for residential real estate in Canada and Winnipeg, according to a report released by RE/MAX.

Decade in Review 1997-2007 found that major housing centres across the country experienced strong consecutive growth between 1997 and 2007. Average prices surged upward while unit sales climbed in tandem as more and more Canadians bought into homeownership. 

The report indicated Winnipeg’s residential market has remained relatively consistent over the past decade, with price gains recorded virtually every year since 1997.

The report said the average price in Winnipeg has climbed 118 per cent — from $86,040 in 1997 to an estimated $187,456 at the end of 2007 — an eight per annual price gain.

“To illustrate, the price of a typical three-bedroom home in River Heights started at $80,000 in 1997 — the same home carried a price tag of $175,000 in 2007,” according to the report.

Residential sales volume during the 10-year period increased by 11.7 per cent to 11,215 units, but the volume would have been higher if inventory levels weren’t so limited.

“Many properties are getting multiple offers and therefore receiving a final sale price that in some cases is well above the asking price,” said WinnipegREALTORS® Association president Darlene Clare.

“But the local market remains affordable despite double-digit price increases last year” added Clare. “Mortgage rates are going down and we have strong employment figures, as well as the second-highest population growth in the country.”

Both Clare and the RE/MAX report predict gains for the condominium lifestyle, which especially appeals to aging baby boomers and first-time buyers.

“Newer condominium developments in the (downtown) area have tapped into demand for product from this growing segment of the market (55-plus),” according to the report. “While these purchasers may be downsizing or making lateral moves, they are spending more on bells and whistles for their new homes.”

The report said move-up buyers in Winnipeg have also been active, playing a major role in the overall health of the housing market.

“The upper-end is vibrant, with the number of homes selling over $400,000 nearly doubling in recent years,” according to the report. “In 1997, 628 homes sold over the $150,000 benchmark. Approximately 5,200 units — an increase of more than 700 per cent — were sold in 2007. Three per cent — or 169 — sold for over $400,000.”

Today, the hottest local markets are the same neighbourhoods as 10 years ago, according to the report, and include River Heights, St. Vital, North Kildonan and Whyte Ridge, although some market niches such as the West End have undergone a revitalization in recent years.

The report indicated Winnipeg’s housing market shows no signs of letting up as demand continues to outpace supply.

“In 2007, there were just over 13,000 homes listed for sale — 10 years earlier, there were 18,000 homes listed for sale.”

Nationally, average price almost doubled in the 10-year period, rising from $154,606 in 1997 to $307,265 in 2007, for a 7.1 per cent annually compounded rate of return. Home sales across the country increased just over 57 per cent from 331,092 units in 1997 to more than half a million sales last year. 

Edmonton led the country in terms of percentage increase in average price. The city saw a 203 per cent upswing in housing values — or an 11.7 per cent increase annually — with average price rising from $111,587 a decade ago to $338,636 in 2007. 

Western Canadian markets surpassed all others between 1997 and 2007, with Calgary ranking second in terms of price appreciation at 189 per cent, Kelowna at 179 per cent, Saskatoon at 137 per cent, Winnipeg at 118 per cent, Victoria at 114 per cent and Greater Vancouver at 99 per cent.

In 2006, homeownership rates in the country were the highest on record at 68.4 per cent. 

“The non-cyclical nature of the decade comes as some surprise,” said Michael Polzler, executive vice-president and regional director of RE/MAX Ontario-Atlantic Canada. “Never before have we seen such a continuous run-up in Canadian real estate. 

“Clearly, strength in all markets has been directly linked to solid growth in local, provincial and national economies. Low interest rates, job security, and consumer confidence have all served to further bolster home-buying activity across the nation,” he added.