Owning in Winnipeg Affordable-WFP

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Owning in Winnipeg affordable

Market balanced compared with other major cities

By: Murray McNeill

Posted: 3:00 AM | Comments: 9 | Last Modified: 6:51 AM | Update

Winnipeg Realtors Association president David Mackenzie says Winnipeg has the second-lowest average selling price compared with other major cities.


Winnipeg Realtors Association president David Mackenzie says Winnipeg has the second-lowest average selling price compared with other major cities. Photo Store

Owning a home is still more affordable in Winnipeg than in most other major Canadian cities, according to a new report from BMO Capital Markets.

The bank said Wednesday Winnipeg is tied with Saskatoon as the third most affordable city in which to buy an existing home, with the average price in the final quarter of 2014 only 3.3 times the median family income.


Price-to-median-family-income ratios for the fourth quarter of 2014:


-- source: BMO Capital Markets

That's despite at least 13 consecutive years of rising selling prices for residential-detached homes in the city, and double-digit increases in seven of those 13 years, Winnipeg Realtors Association (WRA) data shows.

BMO said Halifax is the most affordable market, with a price-to-income ratio of 3.1. Vancouver is the least affordable, with a ratio of 8.5, while the national average is 5.2.

The BMO report also shows Winnipeg is the fourth most affordable city in which to carry a mortgage. Mortgage payments as a percentage of median family income is 18 per cent here, compared with 16 per cent in Halifax and 17 per cent in both Saskatoon and Ottawa.

BMO senior economist Sal Guatieri noted Winnipeg's current price-to-income ratio is quite a bit higher than it was back in 2001, when it was the lowest among the nine cities at a mere 1.7.

"But I think you could argue that at that point, Winnipeg's housing market was a screaming buy," he added. "House prices three or even three and a half times income is not out of line with fair valuations. That's kind of where we're seeing U.S. house prices as well after they recovered."

WRA president Dave MacKenzie said he's not surprised by the BMO findings.

He said another recent comparison of average home prices in nine major Canadian cities showed Winnipeg had the second-lowest average selling price at $274,933. Only Halifax was lower, at $270,120. The rest were all above $325,000.

"It just shows that, again, we are a lot more balanced and insulated to some extent," he added.

Guatieri said the number of active listings on the market could have an impact on selling prices this year. He noted a lot of new listings have flooded the market in recent months, and "If that continues, we could start to see downward pressure on prices."

The BMO report also noted Winnipeg was one of only two cities to see a year-over-year decline (2.8 per cent) in average selling prices in the November to January period. And it was one of five to see a modest year-over-year dip (two per cent) in unit sales, although they were still tracking above the 10-year average.

However, MacKenzie noted Multiple Listing Service (MLS) sales were up four per cent in January alone, compared with a 2.1 per cent decline for Canada.

"So I'm not too concerned," he said.

He said it will be interesting to see what happens once the traditionally busy spring market gets underway.

"I think if we do see any dips... they won't be too significant," he added.

Another interesting finding was Winnipeg has the fourth highest sales-to-new-listings ratio, at 54.7 per cent. That's also above the national average of 52.3 per cent.

Guatieri said that's further evidence of a balanced market.

The BMO report, called Canadian Housing Market: A Winter Chill, said Winnipeg is one of five cities with a balanced housing market. The remainder are seeing buyers-market conditions.

"We judge no regions are sellers' markets, though Vancouver and Toronto come close," it states.


Republished from the Winnipeg Free Press print edition February 19, 2015 B7