It was another record-breaking year in the residential real estate market in Winnipeg and some believe that 2022 will be just as hectic.
According to the final monthly report from the Winnipeg Regional Real Estate Board, there were double digit increases in sales of all types of properties including a whopping 39 per cent increase in condominium sales.
Year-end sales totalled 18,575 units for a year-end dollar volume of $6.25 billion, 28 per cent more than the $4.9 billion sold in 2020.
The sellers-market conditions remain steadfastly in place, with listings continue to fall short of demand.
The last month of the year did not help alleviate that problem with new listings in December coming in 16 per cent less than last December.
The new year starts out with just 1,676 listings still available for sale, 27 per cent less than the number of listings that were available a year ago.
But having said that, the 23,093 listings for the year were only two per cent less than in 2020.
WRREB president Kourosh Doustshenas, said, "Demand clearly overwhelmed supply to create seller’s market conditions and many instances where desirable neighbourhoods throughout our regional market were left with few listings remaining at month end."
There has been much talk of over-heated real estate markets in Canada. While Winnipeg has consistently fallen below the thresholds analysts might use in deploying that designation, the average price of a single family dwelling in the city was up 11 per cent in 2021 — from $341,000 in 2020 to $379,844 in 2021.
"WRREB’s housing prices remain some of the most affordable in the country and that has been documented by a number of national surveys, and even one by UK-based Oxford Economics, which ranked North American metros by housing affordability," Doustshenas said.
“WRREB’s housing prices remain some of the most affordable in the country and that has been documented by a number of national surveys, and even one by UK–based Oxford Economics, which ranked North American metros by housing affordability.” – WRREB president Kourosh Doustshenas
Peter Squire, the WRREB’s vice-president, external relations & market intelligence, said that buyer’s enthusiasm for condominiums in 2021 provided a safety valve of sorts to keep the market in better balance.
"What really impressed me in 2021 was how condominiums came on, up far more than single family home sales," he said. "It shows they are a really good affordable alternative to our more expensive single family homes."
Squire said despite the record-breaking pace of sales the last couple of years, he believes there is still enough supply to keep the records tumbling.
"The last two years have been game-changing, moving us to a higher level," he said. "The challenge for 2022 is that when you perform at such a high, optimal level, how do you keep sustaining that?"
But he said there is plenty of evidence that lots of demand remains in the market.
“The last two years have been game–changing, moving us to a higher level. The challenge for 2022 is that when you perform at such a high, optimal level, how do you keep sustaining that?” – Peter Squire, WRREB’s vice–president
"We still have the largest population cohort, millennials, and they are big and they are certainly still in the market because not all of them were able to buy in 2020 or 2021," he said.
The thinking is that since spending on travel was cut back so dramatically those potential first-time buyers had more time to save money for a down payment.
While interest rates remain at the all-time lows they’ve been at for a few years now, most pundits believe 2022 will finally see a rate increase.
"I believe that is a foregone conclusion," Squire said regarding an interest rate hike in 2022 despite the fact that there have been warnings of rate increases in the past that have not come to be.
The past year was the third in a row of across the board record-breaking metrics in the industry.
The 12,653 residential-detached or single-family home sales in 2021 was up 11 per cent over 2020 and by all accounts would have been higher if there were more listings on the market.
A stark indication of the over-sized demand compared to supply was that the conversion of listings to sales was 86 per cent — more than 20 points higher than the previous five-year average of 64 per cent.
In fact, many areas in the Winnipeg region had more than 90 per cent conversions of single-family home listings to sales.
Squire believes one of the things the industry needs to do in the new year is encourage folks who are considering selling to go ahead and do so.
"This is a well-entrenched sellers market," Squire said. "We need to encourage those owners that are looking to sell for whatever reason. They should know that they will get a good price for their home. It is an opportune time, as good as it has ever been."
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.