Hey there, time traveller!
This article was published 08/02/2021 (540 days ago), so information in it may no longer be current.
If you still don’t believe all the talk about uncertainties the pandemic has created you need look no further than the antics of the housing market in Winnipeg and across the country.
When the global economy hit pause early last spring, many industry experts feared the housing market would collapse.
It did not.In 2020, the Winnipeg real estate market ended with record-setting sales that were 21 per cent better than 2019, and the upward trend is expected to continue. (Wayne Glowacki / Winnipeg Free Press files)
In fact, it spurred unexpected demand, driving markets in Winnipeg and across the country to hit record levels of sales and in total value of transactions.
The Winnipeg Regional Real Estate Board’s annual market insights event held this week, showed data that revealed there was so much demand from buyers that it actually knocked the rock-solid stable Winnipeg market out of whack.
And both Peter Squire, the WRREB’s vice-president, external relations and market intelligence and Shaun Cathcart, senior economist at the Canadian Real Estate Association, said there is absolutely no reason to believe the trend is not going to continue into this year.
That means continuing record numbers of sales — particularly in single-family dwellings — higher prices and record low inventories.
“None of the statistics show any sign of slowing down,” Cathcart said. “It’s only becoming more extreme.”
At the virtual presentation this week Squire said the shift in the trend started in the second half of May when the Manitoba economy started opening up and realtors were able to hold open houses again.
“The latter part of the month showed real promise with similar sales to the year before to offset a bigger decrease in first half,” he said.
During June, sales picked up into what Squire said became a “check mark”-shaped recovery that continued throughout the year and is still going on.
It seems that demand for more space to accommodate the new lockdown lifestyle superceded buyers’ concerns about virus transmission.
As Cathcart said, “Everyone is spending all their time at home — it’s the office, the gym, the kids’ school. People wanted to have more space away from people with the virus.”
Juicing that demand even more are historically low interest rates and, according to a survey from Bloomberg Nanos, a very optimistic attitude among Canadians about the value of real estate.
While the demand rationale is well explained, the lack of supply is not so easily understood.
There were still a silent majority who were taking the lockdown to heart and were not going anywhere, creating historically low listings in Winnipeg and across the country.
“I have no hesitation to say that we have moved into a sellers’ market based on how rapidly depleted our listing supply had become,” said Squire.
Last year started on solid footings in Winnipeg with sales and active listings up 12 per cent in the first quarter, so there was plenty of choice.
“Little did we now at the time what a ride we would be on track for,” Squire said.
With social distancing regulations implemented at the end of March, it pretty much wiped out the spring market, normally the busiest time of the year with a large intake of new listings.
Sales were down 30 per cent in the second quarter, but listings were down even more, at 42 per cent.
But starting in June, it was new records, month after month, and has not let up.
The year ended with a record-setting $4.9 billion in sales, $1 billion or 21 per cent better than 2019 — the largest year-over-year increase since 1992 — and a 17 per cent increase in the number of sales.
And many more homes were going for above list price — 28 per cent in 2020 compared to 18 per cent in 2019.
On the other hand, active listings at the end of 2020 were down 38 per cent. And the same trend is seen across the country. Not surprisingly, considering the disconnect between supply and demand, the trend included rising prices.
Again, not surprisingly, prices were up a modest five per cent in Winnipeg as opposed to “ballistic” price increases, as Cathcart put it, in the Greater Toronto Area of 30 per cent-plus in some communities.
As for 2021, Squire believes the trend will continue and January WRREB stats are in line with those expectations.
Sales were up 28 per cent, dollar volume up 38 per cent and new listings entered in January were down 15 per cent compared to January 2020 when the market seemed appropriately balanced.
The current listing supply at the end of January was 40 per cent less than listings available last year.
The hope is that a successful vaccine program will restore confidence in sellers to finally decide to put their homes on the market and that listings will pick up in the spring and into the second half of the year,
Squire’s forecast (with a cautionary reminder that we’re still in a pandemic and with uncertainty still ruling the day) is that residential detached sales in the Winnipeg regional market will get close to 12,000; that the average residential detached price will tick up to the $350,000-360,000 range; and that average condominium prices have a chance to firm up more this year to the $240,000-to-$245,000 range.
Squire, famously conservative in his forecasting, says the WRREB’s multiple listing service dollar volume will eclipse $5 billion with single-digit percentage price increases.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
Read full biography