The Reiss Report: Condo Real Estate Blog - Spring 2024

Article from Volume 11, Issue Number 2, 2024

The Reiss Report: Condo Real Estate Blog - Spring 2024

By Alan Reiss | Other articles by Alan Reiss | Regular Column

The first quarter of 2024 is moving ahead with strong performance, which continues the strong second-quarter performance of 2023. You will see actual differences in the numbers below from the Winnipeg Regional Real Estate Board’s MLS reporting at the end of March.

Royal LePage’s April report reinforces Winnipeg’s affordable condominium market as it compares to other major Canadian markets. This affordability cushions higher mortgage costs. Royal LePage reports the median price of a condominium in Canada rose 3.5 per cent in the first quarter of this year to $591,900. Winnipeg’s increase in the median price of a condo nearly doubled the national average of 6.9 per cent to $260,400. Winnipeg’s median condominium price is 44 per cent of the national price.

On April 16 the federal government increased the Home Buyers Plan (HBP) ceiling for individuals from $35,000 to $60,000. A couple buying their first condominium can potentially put down up to $120,000. In a market like Winnipeg's, they could easily surpass the 20 per cent down payment threshold to avoid the requirement to pay mortgage insurance, lessening their mortgage monthly interest payments.

In more expensive condominium markets, such as Vancouver’s, with its median condominium price of $844,500, the new maximum HBP withdrawal limit would require significant other sources to get a buyer over the 20 per cent threshold level.

And let’s not forget that first-time buyers trying to get into the home ownership market by buying a condominium can also take advantage of the Tax-Free First Home Savings Account in combination with their HBP. Though this is a new federal tax saving program and will provide them with only $8,000 this year, over five years it could add up to $40,000.

The trend is good for Winnipeg and its regional market this year. Winnipeg Regional Real Estate Board president Daphne Shepherd wrote that by the end of the first quarter this year “there were positive real estate market trends seen with MLS® sales, average prices and dollar volume.The real estate market performance saw increases to MLS® sales and dollar volume each month from January to March, with March and the first quarter totals also up when compared to the same periods last year. When looking at average prices for residential detached, condominium and residential-attached homes in March and in the first quarter of 2024, all were up over last year.”

There is no question the spring market and second quarter will see increased condominium sales activity. We are off to a good start this year, with unusually warm weather kickstarting the spring market. Let’s see what Jeremy Davis, the Winnipeg Regional Real Estate Board director of external relations and market intelligence, says about our condominium market:

Condominium snippets from our Market Release for March:

MLS® sales of 187 for condominiums in March were 26 per cent above the 148 seen last year and five per cent below the five-year average of 196.
Active MLS® listings of 409 for condominiums were down 8 per cent above the 443 seen last March and 18 per cent below the five-year average of 497.
Of the 187 total MLS® condominium sales across the Winnipeg Regional Real Estate Board’s market region in March, 160 were in Winnipeg and 27 outside Winnipeg.
Of the 409 active MLS® listings for condominiums, 301 were in Winnipeg and 108 were outside Winnipeg.
Osborne Village was the neighbourhood in Winnipeg that saw the most MLS® condominium sales in March, followed by Waverley West and St. Vital.
The most active price range for condominiums was the $150,000-$174,999 range, with 28 sales in March, which represented 15 per cent of all MLS® condominium sales.
A condominium in St. Charles was the first this year that sold for more than $1 million.

Q1 Condo Highlights

MLS® sales of 419 for condominiums in Q1 were 20 per cent above the 349 seen in Q1 last year and 4 per cent below the five-year average of 438.
The number of MLS® listings of 703 for condominiums was four per cent above the 676 seen in Q1 last year and 14 per cent below the five-year average of 814.
Of the 419 MLS® condominium sales in Q1, 362 were in Winnipeg and 57 outside Winnipeg.
The average price of a condominium in Q1 was $275,560 in Winnipeg and $259,098 outside Winnipeg.
The average price of $273,320 in Q1 was 12 per cent higher than the $243,757 seen in Q1 last year and 10 per cent above the five-year average of $249,615.
The total dollar volume of $115 million was 35 per cent above last year’s Q1 $85 million and four per cent above the five-year average of $110 million.
Q1 Sales to new listings: 59.6 per cent
Seventy-three per cent of condominium sales in Q1 were sold at less than list price.
Condominium sales in Q1 made up 16.28 per cent of all MLS® sales.
Osborne Village was the neighbourhood in Winnipeg that saw the most Q1 MLS® condominium sales with 50, followed by downtown with 25.
The Morden/Winkler area had the most Q1 MLS® condominium sales outside Winnipeg with 12, followed by Steinbach with nine.

Jeremy Davis adds that the drop in active listings to 409 translates to not much more than two months worth of supply. We can probably expect an increase in sales of more than 200 in April. The average price over last year increased by 12 per cent when comparing the first quarter of this year with the first quarter of last year. In March, nearly five per cent of sales were over $500,000, compared with only 1.35 per cent in March last year. For condos between $250,000 and $399,999, there was a 10 per cent increase in total market share activity. It also helps when you have one of those over-$500,000 condos sell for more than $1 million.

Finally, it is worth noting that in March, slightly more than 20 per cent of condos sold for above list price, compared with less than 11 per cent in the same month last year.

The notable increase in sales this year of 20 per cent, compared with the previous year, is in part due to additional listings but much more to do with a higher conversion rate as it was just under 60 per cent and weak last year at only 51.6 per cent. The conversion rate was at its highest ever for any first quarter in 2022 at 70.5 per cent. It was 56.7 per cent in 2021 and just 34.1 per cent in 2020.

Both the downtown and Morden/Winkler markets produced poor results in March sales activity relative to the supply of listings available at the end of the month. This may place the market to take advantage of an upsurge of activity in the spring market. MLS areas including St. Vital are showing a listing deficit compared with what they are capable of selling every month.

In summary, this year is easily outpacing a poor condominium sales year in 2023. The market should be well ahead at the end of the second quarter. The Bank of Canada’s benchmark rate of five per cent appears to remain steady as a June rate reduction is not anticipated. Expectations are for rates to come down in the second half of this year. Some market analysts advise not to wait for a rate reduction. Price rebounds are expected in Winnipeg as more buyers move into the spring market.

Alan Reiss is a director of CCI Manitoba and a condo specialist realtor for RE/MAX PROFESSIONAL.