Winnipeg’s high ranking in the most recent CIBC Metropolitan Economic Activity Index came as no surprise to Peter Squire, the MLS® market analyst for WinnipegREALTORS®.
“Winnipeggers’ optimistic outlook is really being played out in our local housing market,” said Squire, “and the MLS® performance rankings in the first quarter of 2011 compared to the same period in 2010 and 2009 are part and parcel of Winnipeg’s overall favourable positioning versus other cities across Canada.”
In the CIBC report, Winnipeg had the third highest increase in MLS® unit sales, with only Vancouver and Sudbury higher. Saskatoon was a close fourth and Regina was just remaining in positive territory. All other cities saw first quarter sales dip into negative percentage changes year-over-year.
On MLS® average price changes, according to the report, Winnipeg placed sixth overall and the expectation is for a price increase from seven to nine per cent, which is within WinnipegREALTORS® residential-detached annual forecast. Vancouver is expected to have the highest increase at a quite extraordinary 18 per cent, which is being heavily influenced by Chinese investors.
Other key indicators making up the index are population growth, employment growth, unemployment rate, full-time share in total employment, personal bankruptcy rate, business bankruptcy rate, housing starts and non-residential building permits.
“The positive momentum in Winnipeg is a relatively new development,” said CIBC’s deputy-chief economist Benjamin Tal. “Note that during the recession the city followed the trajectory of the national economy very closely.
“However, recent quarters have seen the city outperforming the national average, with the performance gap currently at a record high. The city’s ranking is helped by a relatively strong population growth (1.7 per cent year-over-year), above-average employment growth, and the lowest unemployment rate among all major urban centres. The city is also enjoying very low consumer and business bankruptcy rates, while the housing market is still very strong.”
Helping Tal make this rosy assessment for Winnipeg was the return of the NHL. He certainly sees the Winnipeg Jets as a key new development to add to the positive momentum Winnipeg is experiencing. Whether you want to call it a domino effect or not, having a significant new private-sector investment in a mixed use development on Portage Avenue across the street from the MTS Centre come to fruition after the announcement of the NHL’s return. Also, the plan is to go ahead with expansion of the Winnipeg Convention Centre after many previous attempts.
REALTORS® will hear Benjamin Tal’s insight into the market six months from now when he appears at the WinnipegREALTORS® annual forecast breakfast.
His keen insights on the Canadian economy, vis-a-vis world markets and other economic trends, including what he sees happening in 2012 with interest rates, will be of great interest to professionals active in the real estate industry. Moreover, he’ll provide an update on how Winnipeg stacks up in relation to other major Canadian cities.
Just like in CFL football and hopefully in NHL hockey, can we beat out Toronto in next year’s index ranking to take over the No. 1 spot?
WinnipegREALTORS® MLS® activity in the first 15 days of July is trending very well. It shows sales are rivaling the best July ever for this time period in 2009, and dollar volume is again on pace to be the highest on record for the month. New listings are up over last year with the equivalent of 73 per cent being sold thus far.
Listings converted to sales is a significant indicator of how well a local real estate market is faring. It shows the strength of demand for housing in relation to the availability of supply.
In the July 15, 2011 Canadian Real Estate Association (CREA) news release covering June MLS® market activity, it explains that about 60 per cent of local housing markets in Canada were balanced in June. Half of the remaining markets can be classified as sellers’ markets based on a conversion of listings to sales ratio of higher than 60 per cent.
The year-to-date ratio of new listings to sales is the highest in Winnipeg at 70.8 per cent. Only three other Ontario cities come close: Toronto, Hamilton-Burlington and Thunder Bay are slightly above the 60-per-cent level CREA uses as a tipping point to move a market into sellers’ territory. The average for Canada is 49.5 per cent. In relation to other MLS® markets, especially with regard to its housing supply and demand situation, the CREA release mentioned that the seasonally-adjusted months of inventory stood at six months at the end of June for Winnipeg. That figure represents the number of months it would take to sell out the entire inventory if there no new listings come onto the market.
In Manitoba’s case — Winnipeg’s is not available but would be very similar — there were only 2.5 months of homes available for sale as of the end of June.