Healthy real estate market forecast for city

Hey there, time traveller!
This article was published 12/12/2017 (2320 days ago), so information in it may no longer be current.

Falling unemployment rates and rising household incomes in Manitoba are expected to counter moves by the federal government to cool off hot housing markets in Toronto and Vancouver, leading to a four per cent rise in average selling prices in Winnipeg in 2018, a market survey suggests.

“I think the big news is another strong year predicted, despite some of the regulatory changes coming in from the feds,” said Michael Froese, managing partner of Royal LePage Prime Real Estate.

“If I were to really sum it up, the pros are outweighing the cons.”

Royal LePage’s Market Survey Forecast predicts the aggregate house price in Winnipeg will rise four per cent to $315,120.

But the market might see a slight cooling period in the first quarter as buyers and sellers adjust to new regulations imposed by the Office of the Superintendent for Financial Institutions.

Froese said a new “stress test” for those seeking mortgages will require — starting Jan. 1 — buyers to qualify for a mortgage at the federal benchmark interest rate of 4.84 per cent, regardless of any lower rates currently offered.

That might force those who barely qualify to the sidelines, but he predicts the city’s strong economy will more than make up the difference.

Statistics Canada said average hourly wages in Manitoba grew by 3.1 per cent between November 2016 and November 2017, while the province’s labour market grew by 2.1 per cent

Retail demand grew by 3.2 per cent and manufacturing sales grew by 9.3 per cent from September 2016 to September 2017, the latest period for which data are available.

“When we look at housing metrics, if there are more people and more jobs, that generally means more housing,” Froese said.

Even so, Winnipeg remains the most affordable market in the country, lower even than Regina, he said.

Halifax is next on the list with a forecast price of $326,975. Regina, at $329,289, is third.

The new regulation, combined with foreign-buyer surcharges of 15 per cent, are intended to rein in Toronto’s and Vancouver’s soaring markets. Royal LePage predicts only modest success, with Toronto prices predicted to rise 6.8 per cent to $901,392 and Vancouver’s to rise 5.2 per cent to $1,353,924.

Phil Soper, president and CEO of Royal LePage, said it’s not surprising the regulations are expected to have minimal effect.

“It is prudent that policy-makers introduce measures that help protect the market from runaway price inflation,” he said.

“However, natural supply and demand forces will always triumph over regulatory tinkering.”

Froese said the realty community is generally pleased with Winnipeg’s market, as four per cent represents strong growth with less fear of creating a bubble.

kelly.taylor@freepress.mb.ca