City House Prices Rise despite National Slowdown How Winnipeg Stacks Up

Article excerpt

HOMEBUYERS and builders tapped the brakes last month, but a hefty hike in second-quarter selling prices shows there's still a lot of get up and go in the Winnipeg housing market, industry officials say.

While some observers said Tuesday the Canadian market has reached a tipping point -- CIBC economist Emanuella Enanajor said slowing mortgage and consumer debt accumulation indicates Canadian house prices may dip 10 per cent over the next year or so -- others said that won't be the case here.

Spokespeople for Canada Mortgage and Housing Corp. and Royal LePage Real Estate Services said they still expect the average selling price for a resale home to rise by about five per cent this year in Winnipeg.

"I think that overall, we just have a strong economy and things are going good," said John Froese, a broker with Royal LePage Prime Real Estate in Winnipeg. "There's very little bad news for Manitoba."

The results of Royal LePage's latest national house prices survey, issued Tuesday, seem to back that up. They showed a strong demand for condominiums and bungalows kept average selling prices climbing between 4.7 and 9.2 per cent during the April-to-June period, depending on the type of home. That compared to national average price gains of between 3.3 and 5.5 per cent.

Froese said one potential bump in the road could be tighter federal mortgage-lending rules that came into effect on Monday. Those changes, which reduce the maximum amortization period to 25 years from 30 and the equity borrowing limit to 80 per cent from 85 per cent, might force some first-time homebuyers to delay their purchases.

"But they're still going to be buying. They'll just have to wait a little longer," he said. "So it's going to slow things down a little bit. Not a lot, but a little bit."

Dianne Himbeault, Canada Mortgage and Housing Corp.'s senior market analyst for Manitoba, also foresees a strong second half for both the new and resale homes markets here.

Although June housing-start numbers Tuesday showed a 37 per cent drop in single-family housing starts in the Winnipeg Census Metropolitan Area, Himbeault said that was likely just builders taking a breather after a 50-per-cent surge in single-family starts in May.

"That was probably a pace that was a little hard to maintain," she said. …