After a real solid first quarter of MLS® sales activity, April sales were more subdued, according to the month-end report released by WinnipegREALTORS®.
Unit sales of 1,300 were down five per cent from a record April in 2016, but were still up two per cent over the 10-year average for the month.
MLS® dollar volume decreased one per cent in April, however, for the first four months, dollar volume was up two per cent to $1.08 billion.
New MLS® listings in April fell by five per cent, while the inventory of active listings at the end of April was down seven per cent.
The percentage of new listings being converted to sales is in line with April 2016, when the equivalent of over 53 per cent of the 2,439 listings entered on the MLS® system in April were sold.
The drop off in sales activity compared to April 2016 was most noticeable in the first-time buyer market segment.
Peter Squire, the market analyst for WinnipegREALTORS®, said the association has identified a concern regarding the new stress test on insured mortgages and its impact on buyer qualification for those putting down less than 20 per cent on a home purchase.
“April is the kickoff to our spring market and first-time buyers are a driving force to generating sales activity,” said Blair Sonnichsen, president of WinnipegREALTORS®. “We are now learning first-hand how tougher mortgage qualifications and higher insurance fees are making it more difficult for this buyer segment to purchase a home.”
A recent survey by Genworth Canada indicated that 57 per cent of current homeowners believed that the stricter mortgage qualification rules for individuals putting down less than 20 per cent would make home purchases “more difficult.”
Another 32 per cent said it would be “much more difficult.”
For residential-detached properties under $300,000, there was a 15 per cent decrease in sales activity in comparison to last April. On the other hand, upper price ranges in residential-detached outperformed April 2016.
There was also a decline in condominium sales in the price ranges from $150,000 to $249,999.
“Another new development this year, which helped propel higher-end sales, was the city of Winnipeg’s impact fee which came into effect on May 1,” said Squire.
“There have already been 15 sales of homes valued over $1 million and six of those are new or to be built homes in the Waverley West MLS® area,” he added.
Squire said that it is clear buyers are advancing their plans to commit earlier this year to avoid paying the impact fee ($500 for every 100 square feet). If new home buyers or developers took out building permits before May 1, construction must begin before November 1 this year.
The impact fee applies to new homes and condominiums being built in certain suburban areas of Winnipeg.
One two-storey penthouse condominium also sold for over $1 million this year.
It is also apparent from examining April sales activity that vacant lots in rural municipalities have benefited from the onset of higher fees in Winnipeg. There was a jump of 27 per cent last month in vacant lot sales from April 2016, with the vast majority of those are located outside Winnipeg.
“Demand remains strong for MLS® listings,” said Sonnichsen. “The average days to sell for residential-detached and condominiums was better than last year’s record-setting April.”
In terms of residential-detached sales activity, while the most active price range remained from $250,000 to $299,999 at 20 per cent, the next busiest was from $300,000 to $349,999 at 16 per cent.
The average period to sell a home in April was 25 days, one day quicker than record-setting April 2016. The sales-to-list price ratio in April was 99.19 per cent, an improvement from the 98.59 per cent in April last year.
Condominium sales continue to be most active in the $150,000 to $199,999 price range, which represented 30 per cent of total sales. The average period to sell a condo in April was 40 days, one day quicker than April 2016.
Sonnichsen advises buyers and sellers to call a REALTOR® for information about the housing market.