Resale Homes
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Manitoba home values continue to increase
Despite assurances all along that the housing situation in Canada was nothing like what was happening in the United States, Canadians have still been somewhat reluctant to take advantage of favourable buying conditions.
Although this customary Canadian cautiousness has served us well over time, it has also caused us to miss out on certain opportunities. A couple of weeks ago, TD Economics released an excellent comparative analysis of the two countries situations.
In the United States, housing starts had been exceeding demand for four years. Overbuilding causing a large inventory of houses was excessive. In Canada, what appeared to be overbuilding was, in fact, a compensatory response to a decade of undersupply.
In a couple of major urban centres in other provinces, there may be examples of oversupply or inventory, but not in Manitoba. There is no anticipation of price devaluations here. As a matter of fact, home values continue to increase.
Mortgage interest deductibility from personal income tax, steering households towards larger mortgages, encouraging "flipping" and discouraging the accumulation of home equity hurt the U.S. market. Canada's tax laws do not permit similar deductions and we find a great degree of comfort in home ownership.
Homeowner equity in the U.S. was below 40 per cent before the economic tailspin. Obviously, it is much lower now. In Canada, we have not allowed credit to overextend our capabilities and equity averages over 55 per cent.
In Manitoba and Saskatchewan, that number is even higher. Canadians can afford to own their houses, diminishing the likelihood of the snowball effect of foreclosures south of the border.
New home ownership remains a sage investment in Canada and Manitoba. The market continues to be strong with no signs of a duplication of the American situation. Now is definitely a good time to investigate the purchase of a new home.
This column prepared by the Manitoba Home Builders' Association.
Resale Homes
New real estate mantra: local, local, local
We may have flooding, mosquitoes and painfully cold winters, but we continue to have a buoyant housing market. Compared to most of the other housing markets in the country, Manitoba real estate continues to be on an upswing for both buyers and sellers.
Debbie Goodfellow, president of WinnipegREALTORS, recently attended the Canadian Real Estate Association (CREA) annual general meeting in Ottawa, where she heard gloomy stories of how the recession is wreaking havoc on housing markets across the country. Manitoba is the exception, along with Saskatchewan and a pocket in the Maritimes.
"Winnipeg is a stable market," says Goodfellow. "Now it's come home to us -- we don't have those peaks and valleys like other markets."
Goodfellow's advice to Winnipeg home buyers and sellers is to stop watching CNN and national news programs for information on the real estate market.
"You don't listen to a weather report from Vancouver and decide how to dress for the day," she says. "The same goes for real estate -- it's all local."
In fact, Winnipeg continues to experience a strong housing market. For the first quarter of 2009, WinnipegREALTORS reported the second best first quarter of its 106-year history. That's quite a feat given the recession, the economic uncertainty facing so many industries and the fact that we experienced one of the coldest winters in recent history.
When she took over as president of WinnipegREALTORS at the beginning of the year, Goodfellow says she was quite cautiously optimistic for 2009. In January, she said it looked like the market could have gone either way, but the year is turning out to be another positive one.
"The consumer has gone from being nervous to confident," says Goodfellow. "The mood is quite buoyant and people are still proceeding with their plans."
The real estate market has really picked up in the last month, she notes, as more buyers start looking for houses in the spring and more listings are going up all the time. As for the type of market, it's changed from a strong seller's market in recent years to a more balanced market.
For the first quarter, year-to-date MLS sales were down 10 per cent compared to last year, but dollar volume only dropped four per cent compared to the first quarter of 2008. The number of listings was up 11 per cent from last year, testament to the fact that the real estate market has become more balanced.
"We have a lot more listings," notes Goodfellow. "But we still have pockets where houses come up and are highly sought after with multiple offers."
For the most part, sellers are getting close to the list price for their houses. But, as with anything, there are exceptions to the rule. In one week, Goodfellow says her company, Goodfellow & Goodfellow Real Estate, listed one house that got three offers and sold well over the list price, but had another listing where they had to reduce the price and it was on the market for some time.
The only downside these days in our local market is the weather, not the economy. Housing listings and sales are down in areas like the Interlake, Selkirk and south of the city due to the poor weather and flood concerns.
"We're not affected by the economy in Manitoba, but we've had a long cold stretch and then two snowstorms and now the flooding," says Goodfellow.
Looking ahead, Goodfellow says she continues to be optimistic about the Winnipeg real estate market. The average home sale price was up five per cent for the first quarter compared to 2008, rising to $209,254 from $199,546 last year, setting a new record for Manitoba. That's largely due to the fact that there has been a shift in sales to higher-priced homes, with more houses selling over the $200,000 mark. Condominium sales are up by four per cent for the first quarter, with prices up three per cent. The average condo sale price rose to $175,429 from $169,947 in 2008.
"Overall, the market is really good," says Goodfellow. "We have balanced market conditions where buyers have more to choose from, interest rates are at historic lows, and our prices remain firm if not even higher than last year."
Resale Homes
New to Canada? Here are some tips on finding your new home
CANADA'S population is becoming increasingly diverse in nearly every region of the country.
According to the 2006 Census, an average of about 240,000 newcomers arrive in Canada each year. For many, finding a safe, affordable place to live can be one of the most immediate challenges. To help Canada's newcomers make the best decisions for their families, Canada Mortgage and Housing Corp. offers the following tips on what to look for when buying or renting a new home:
Try to be as flexible as possible, especially when choosing your first home.
Housing in Canada can vary greatly between different provinces and territories, cities, communities and even neighbourhoods. Decide in advance how much you can afford to spend, how many rooms you will need, where you'd like to live and what type of housing will help your family feel most at home.
Be prepared to adapt to Canadian housing customs and practices.
For example, Canadians consider a family with three or four children to be quite large, so finding a home with three or more bedrooms can be difficult. You may have to accept a smaller place or less central location until you can find what you really want. Or consider a temporary measure such as using bunk beds so small children can comfortably share a room.
Chances are that the first place you live in Canada will be rented.
If you are renting, find out exactly what the rent will include. If you use a rental locator, check their reputation with the local Better Business Bureau.
Remember that while the rent may be higher in central areas, these neighbourhoods also often offer greater access to work, shopping, recreation and public transportation.
Use several different search methods to find your new home.
For example, ask relatives or friends who already live in the area for help or advice.
Search the classified ads of ethnic, community or daily newspapers. Check bulletin boards in grocery stores, laundromats, health clinics, thrift stores, libraries, community centres, places of worship and service clubs.
If you're buying a home, make sure you have the right team of professionals on your side.
You will likely want to hire an appraiser and home inspector to get a better idea of the condition of a home and how much it is worth. You will also need a lawyer to help protect your interests.
In addition, if you need to arrange for a mortgage, you will probably need to find a lender or mortgage broker who can help you buy your home.
Before you begin searching for a home, learn more about the housing market.
Figure out how much house you can realistically afford. And ask a lender or mortgage broker in advance how large a mortgage loan you will qualify for.
For more information on housing in Canada or to receive a free electronic copy of The Newcomer's Guide To Canadian Housing in either English or French, visit www.cmhc.ca or Call CMHC at 1-800-668-2642.
-- Canwest News Service
