The local real estate market booms
Real estate is more than just something to come home to at the end of the day. It is one of our country’s largest industries. Canada’s residential investment is a huge component of our GDP and a driving force of economic activity. From buying and selling to renovating, the industry plays a significant role in employment, serves to illustrate overall consumer spending and spirits, and identifies the wealth of individuals and businesses. This has a ripple effect that can be felt far and wide throughout the economy.
In recent years, Manitoba, and particularly Winnipeg, have seen a very strong seller’s market, and the emergence of COVID—and the subsequent focus on our houses as we did nothing but stay at home—has only strengthened the industry.
According to Peter Squire, vice-president of external relations and market intelligence with the Winnipeg Regional Real Estate Board, this exceptionally tight housing market, particularly for single-family homes, is caused by a strong demand and low supply, which is putting pressure on pricing. Between 2020 and 2021, residential property sales were up 17.2 per cent, with annual sales accounting for over $6.56 billion. But the actual number of new listings was down 1.4 per cent and the average price of a single-family home was up 9.8 per cent to $333,841.
But just what is causing this high demand?
Strong population growth is playing a huge role. Winnipeg’s population is up over six per cent, between the 2016 and 2021 censuses. Looking beyond the capital, nearby Niverville had the fifth highest population growth in Canada at a whopping 29 per cent. “People need a place to live and some of them have certainly moved into our ownership market,” says Squire.
Affordability is also a factor. The average price amongst all residential sales in Winnipeg was $350,715 and Manitoba’s is at $334,256, while across Canada, the number leaps to $713,542. The ability to afford a house here is very appealing as many markets are pricing out first-time home buyers. Add the extremely low interest rates of late and buyers—new and current—are jumping at the chance to get property.
“Winnipeg has historically been an affordable city to live in relative to other parts of the country,” says Marcia Bergen, realtor and team lead of Marcia Bergen Group with Royal LePage Prime Real Estate. “Part of what is making Winnipeg hotter is the price point, but also we have seen a number of our buyers relocating back to Winnipeg due to the changed work environment caused by COVID. For example, the CEO who needed to relocate their family to another city but is now mandated that they can work from anywhere in the country makes a move back to Winnipeg more feasible.”
Bergen also points to the province’s diverse economy as a safety net and good investment strategy for housing, which has historically helped Winnipeg and Manitoba avoid a boom or bust real estate environment. This has all come together to create a very appealing—and very competitive—market.
As the housing demand continues to grow, the home improvement industry has also been booming throughout the pandemic due to everything from lumber shortages and costs of materials escalating to supply chain issues and an increase in demand as some homeowners choose to improve rather than move. But this frenzy for our homes has to settle down at some point, right?
To even out the industry, a more balanced housing market is needed, with more inventory available for sale, says Squire. This could come from a strong interest for other housing options beyond the coveted single-family homes, such as condos, and new home builders scaling up activity as COVID restrictions ease and the province moves into an endemic state.