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Policy-Induced Retraction in Winnipeg Real Estate Sales

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Policy-Induced Retraction in Winnipeg Real Estate Sales
3 min. read

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According to the latest data available, Winnipeg real estate sales decreased in 2018 compared to 2017. This may come across as bad news, but 2018 was not a typical year for the Canadian housing market overall. In fact, when put in context, Winnipeg metrics actually align between the two years. Find out more:

The Inequity of Comparing 2018 to 2017

The fact of the matter is that 2016 was a record-breaking year for Winnipeg real estate, and 2017 was not far behind. According to the latest report from the Canadian Real Estate Association (CREA), 2018 saw a 5% decrease in sales from a year ago and a 6% decrease from two years ago. Experts refer to both declines as policy-induced retractions.

Total Sales and Annual Dollar Volume

Total sales in Winnipeg came to 12,773 in 2018, which was a less than 3% drop from the five-year average and just 1% lower than the ten-year average. Annual dollar volume, which came in at $3.77 billion, decreased by less than 4% from 2017 but was 3% higher than the five-year average.

The number of listings was also on the rise, with a total of 23,834 homes for sale on the MLS in 2018, a 2% increase over 2017. By the end of the year, the Winnipeg real estate market recorded 3,235 active listings.

Putting the Numbers into Perspective

 “Keeping things in perspective, with some of the headwinds we faced in 2018 with higher interest rates and more stringent mortgage qualification requirements, it should be no surprise that 2018 fell short of our best years on record. Simply put, we believe fewer buyers were able to qualify and successfully complete a purchase they wished to make in 2018,” said Chris Dudeck, the outgoing president of WinnipegREALTORS®, as cited on the CREA website.

According to Dudeck, the shifts in 2018 represent more of a “policy-induced retraction, albeit a modest one, than changes in key market factors from 2017.” He points to the annual ratio comparisons for Winnipeg single-family homes, which were very close at 98.48% for 2018 and 98.59% for 2017. He further noted that the average number of days Winnipeg condos and houses took to sell rose by just one day from 2017 to 2018.

Affordability Helped Prevent a Crash

Compared to other areas of Canada, which are experiencing the worst housing downturn in the past decade, Winnipeg was less affected. WinnipegREALTORS® points to several causes, including the fact that it remains an affordable option relative to other markets in the country.

According to the 2018 Housing Trends and Affordability Report from RBC, ownership costs in Winnipeg remain well under control. The percentage of median pre-tax income required to pay for a home (including mortgage costs, property taxes, and utilities) is 31% in Winnipeg, just shy of the 29.5% long-term average.

Average Home Sale Prices Rose Modestly

The average cost of a Winnipeg detached home was $321,945 in 2018, a modest 2% increase compared to 2017. In 2018, over half of the city’s detached homes sold for less than $300,000, while 28% went for prices in the $300,000 – $399,999 range. The most expensive house transacted last year had a price tag of $2.6 million, while total dollar volume for 2018 was nearly $3 billion.

Nine out of ten condos sold in 2018 went for less than $350,000. The most active price range was between $150,000 and $199,000, which made up 27% of all condo sales. The highest price for a condo was $1.2 million and the total dollar volume of sales for this property type was just over $391 million.

Two areas of the MLS that were less impacted by buyer challenges: the southwest zone, which saw sales drop less than 1%, and the rural municipalities that surround Winnipeg, which also decreased around 1%. The rural zone includes more than 26% of all MLS sales.

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