Condo sales growing by leaps and bounds
By Jon Waldman
Anyone who has attempted to buy a home in Winnipeg over the last decade knows how difficult the market can be. Prices have steadily been on the rise while terms like “housing crisis” have loomed large despite the seemingly ever-present buildouts of new communities and multi-residential developments.
In the simplest of explanations, what contributed to this push has been supply versus demand, with a sub-battle emerging between two major dwelling spaces – houses and condominiums, and while both have their drawing power, the condo has gained traction the likes of which are nothing short of stunning.
David Squire, MLS market analyst, points to sales that have seen condos rapidly grow in market share over the last few years. In 2013, there were 1,759 MLS sales for condominiums, representing the highest number in years and the pique of a steady increase in sales since 2008, where sales were at 1,228. In that same period, house sales dropped from 9,789 to 9,248, contributing to condo market share rising from 9.74 per cent in 2008 to 13.68 per cent this past year.
Squire sees that number being even larger this year.
“Year-to-date as of the end of June, our condominium sales are up 11% at 963 sales,” he says, adding that current market share is now hovering just south of the 15 per cent mark. “It is likely we will set a new benchmark high for condominium sales through our MLS®. I can see us reaching 2,000 condo sales in the next five years if not sooner based on current trends.”
The reasons behind this increase are fairly simple.
“Lifestyle is usually the most important factor, and financial number two,” says David Powell, president of the Winnipeg Realtors Association and owner and broker with Powell Property Group. “In today’s day and age, if you’re a single, young professional, your work days are usually longer than 40 hours per week and you need some maintenance-free living. Even for a younger, single parent, taking care of a house is a little bit harder. For the older demographic it’s the same thing. They’ve gone through that gambit of maintenance and repair on a house, and now it’s time for a little bit of easier, especially for snowbirds where it’s easier to lock up and take off.”
Roberta Weiss, Director at the Manitoba Real Estate Association and a Realtor with Century 21, sees the same split market for potential condo owners. In analyzing the need, she adds another perspective – that the family dynamic, once changed, necessitates a move to a smaller dwelling for older homeowners, while financials play a part in the decision-making process for a younger buyer.
In the older couples portion, she remarks that, “Maybe the kids are gone, so they’re empty-nesters – they don’t need a 3,000-square-foot, two-storey home for just the two of them,” while commenting that younger, first-time buyers “can’t get into the housing market, simply because of price.”
“The highest percentage of sales from our staff last month,” she continues, “were condos under $200,000, so for somebody who’s a young person, under 35 or so, who wants to get into the housing market but can’t afford a single family home (which she notes as being well over $200,000), it’s a good place to start building some equity and making the investment.”
The Right Location
Naturally, finding the right condo for you (and possibly your family) becomes partly dependent on the area of the city you want to be in. If you’re well-established, for example, in St. James, you may not be looking towards East Kildonan for your new home.
“The Wellington Crescent area has always been popular because of the proximity to shopping – Osborne Village, Corydon, that kind of thing,” she says. “There has been a lot of development in St. Vital between Bishop Grandin and the perimeter, there are a lot of developments in St. Boniface as well and a lot of activity in Transcona…I can’t think of one area in the city where, if you want to own a condo, that there isn’t something for you there. Everyone has a comfort zone of where they want to live in the city.”
What has seen a decline is the apartment market in Winnipeg. While new blocks are developed and have been for the last decade or so, the shopper is a little more wise to the investment and potential of condos.
“Most consumers recognize that when you rent for $1,200-$1,500 a month and you’re leaving with no equity position, it’s always better to buy, especially in Winnipeg where you’re looking at condo prices increasing in double digits right now,” Powell remarks.
On that note, Powell remarks that condo prices are not slowing down, and forecasts that the trend will continue to see a rise. “I think there’s room in the marketplace for diversification from apartment-style to townhouse to bungalow style, from under $200,000 to a million dollars. I think there’s a lot of room for continuous growth. The demand is still there – we’re seeing an increase in listings, sales and dollar volume, so all that points to is that this market is coming along nicely.”
“If the crystal ball is working, we’ve still got three to five years of strong growth in Winnipeg.”
Weiss, however, sees that saturation is beginning to take hold. “It’s taking a little bit longer for sales to happen. There’s lots of inventory out there,” she says, noting that during a mid-July interview, 400 condos were listed for sale on MLS. “You have to realize that for new condos, there may be only one, two or three units of that entire property on MLS to try to attract buyers, while there may be 50 units for sale.”