Winnipeg Realtors recently held a breakfast session featuring respected economist Benjamin Tal.
Tal spoke to a sold-out audience about the economy in general and, more specifically, the housing market. His message was good news mixed with some caution.
He noted the lower Canadian dollar should help the manufacturing community when it comes to cross-border trading. A stronger manufacturing sector is important to a city like Winnipeg.
He also focused on the central bank's decision to drop its key lending rate. This will further push down mortgage rates, which then invariably leads to increased home sales. The decrease in mortgage rates is secondary in Canada and Manitoba to the message the economy is stable, the dollar is solid and everyone should be comfortable with business as usual.
The naysayers and prophets of doom were set straight when Tal spoke against the existence of a real estate bubble and the possibility of a crash. He agreed the market will be tested, certainly in some regions more than others, but it is still strong.
One major benefit of continuing low mortgage rates is homebuyers are able to pay down their mortgages at a faster rate. He projected interest rates would not increase until 2016 or 2017. This would allow buyers to lock in or renew at these great rates.
The impact of positive interest rates can be seen in the local housing industry. Winnipeg Realtors reports inventory has increased over the past year, thereby making Winnipeg a more balanced market for buyers and sellers. This represents a change from what was previously a sellers' market.
With this increased resale inventory, combined with the wide selection of new homes available on the market, the time has never been better for consumers to look for a new home. The first-time buyer has always been a prime market as young people look to establish roots in the community and establish personal equity. Those looking to upgrade to a new home are still having success in selling their existing homes for excellent prices as home prices continue to increase year after year.
Those looking for a new home have been visiting show homes considerably more frequently this year, likely due in part to a much milder winter. Things heat up even more in March when the Spring Parade of Homes takes place from March 7 to March 29.
Mike Moore is president of the Manitoba Home Builders' Association
