The Reiss Report: Condo Real Estate Blog - Fall 2024

Article from Volume 11, Issue Number 4, 2024

The Reiss Report: Condo Real Estate Blog - Fall 2024

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

Find out what is happening in the Winnipeg condominium real estate market

It’s evident that the local market has benefited from the reversal of the interest rate increases that dampened consumer sentiment in 2022 and 2023.

As rates stabilized through the second half of 2023 and have come down four times so far this year, and another cut is possible in December, one of the most affordable condominium markets in the country has become even more affordable. The current overnight Bank of Canada rate is 4.25 per cent.

First-time buyers are particularly well positioned to capitalize on the situation, with a few key recent developments:

In the 2024 federal budget, the highly successful Home Buyers’ Plan saw its limit increased to $60,000 per individual from $35,000. First-time buyers are now able to tap into their RRSPs to have $25,000 more to contribute to a down payment.
The Tax-Free First Home Savings Account was introduced. It allows Canadians to contribute up to $8,000 a year, to a lifetime limit of $40,000, toward their first down payment. It has been eagerly embraced by 750,000 Canadians.
Effective Dec. 15, 2024, first-time buyers of existing condominiums can opt for a 30-year amortization period (currently it’s 25) to reduce the cost of their monthly mortgage payments. Buyers of new builds are already eligible for the 30-year amortization period.
For existing condominium owners, a new measure under the Canadian Mortgage Charter allows them, as insured mortgage holders, to switch lenders at renewal without being subject to another mortgage stress test. This has the potential of leading to a better mortgage deal for their next condominium purchase.

So how did condominiums fare in the summer months?

July was impressive, as its 215 sales were just shy of the 217 sold in April, traditionally the month that kicks off the busiest quarter of the year. The July total is 8 per cent higher than that of July 2023. The July average sales price of $284,151 was up 12 per cent over July 2023.

August continued strong, with 210 sales, another 8 per cent increase over the same month last year.

The Winnipeg Regional Real Estate Board’s 2024-25 president, Daphne Shepherd, singled out condominiums' sterling performance in the board’s August market release. “On a year-to-date basis, MLS® sales for the main three property types are also up over last year. Condominium MLS® sales were the lone property type to rise above the five-year average both in August and on a year-to-date basis, signalling steady demand in the condominium market.”

Speaking of the Winnipeg Regional Real Estate Board, its director of external relations and market intelligence, Jeremy Davis, provides a good summary of the September, third quarter and year-to-date condominium markets.

MLS® sales of 174 condominiums in September were 3 per cent higher than the 169 seen last September and 6 per cent below the five-year average of 184.
Active MLS® listings of 469 condominiums were 4 per cent higher than the 449 seen last September and 13 per cent below the five-year average of 539.
The average price for a condominium was $277,334 in September, 2 per cent above last September’s $272,513 and 8 per cent above the five-year average of $257,335.
Of the 174 condominium MLS® sales across the Winnipeg Regional Real Estate Board’s market region in September, 146 were in Winnipeg, 28 outside Winnipeg.
Of the 469 active MLS® condominium listings, 386 were in Winnipeg and 83 outside Winnipeg.
The Winnipeg neighbourhood with the most MLS® condominium sales was Osborne Village, followed by Waverley West.
The most active price range for condominiums was $250,000-$274,999, with 25 MLS® sales in September. That represents 14 per cent of all condominium MLS® sales.
The $200,000-$224,999 price range was the second most active, with 22 sales in September, representing 13 per cent of all condominium MLS® sales.

January-to-September condo highlights

MLS® condominium sales of 1,714 were 10 per cent above the 1,554 seen in the first three quarters of 2023 and 2 per cent above the five-year average of 1,689.
MLS® listings of 2,569 condominiums were 6 per cent above the 2,428 seen through three quarters of 2023 and 5 per cent below the five-year average of 2,715.
The average price through three quarters of 2024 of $277,196, 7 per cent higher than the $259,784 seen in 2023 and 8 per cent above the five-year average of $257,462.
The total dollar volume of $475 million was 18 per cent above 2023’s $404 million and 9 per cent above the five -year average of $435 million.
Three quarter Sales to Listings ratio: 66.72 per cent
Osborne Village also saw the most MLS® sales, followed by Linden Woods.
Sixty-nine per cent of the condominium MLS® sales were sold under list price.
Condominium MLS® sales represented 15 per cent of all MLS® sales.
July-to-September condo highlights
Condominium MLS® sales of 597 were up 6 per cent over the 562 in the third quarter of 2023 and 1 per cent below the five-year average of 604.
Listings of 895 were 6 per cent higher than the 846 seen in 2023 and 4 per cent below the five-year average of 929.
The average price of $277,477 was up 3 per cent over 2023’s $268,354 and 7 per cent higher than the five-year average of $259,857.
The dollar volume of $166 million was up 10 per cent over the $151 million seen in 2023 and 6 per cent higher than the five-year average of $157 million.
Third quarter Sales to Listings ratio: 67 per cent

Davis covers off everything quite well, so I have only a few more points to make in respect to a solid third quarter and full year for condominium sales and prices.

For one, condominium sales have rebounded in 2024 by an increase of 10 per cent to inch closer to the second-best year on record, 2022, when condominium sales at the end of the year reached above 2,000 for the second year in a row to 2,184. That was still well back from the 2021 high watermark of 2,572.

This year has also seen the highest apartment tower condominium sale price ever, at $1.9 million. The condo, on Wellington Crescent, is a very opulent and spacious penthouse overlooking the river. This sale took place in September, when another six sales eclipsed $500,000, four more than in September 2023.

As for MLS® areas, and this is based on a reasonable number of sales in nine months to not render an average price too skewed one way or another, East St. Paul, with 12 sales, had an average sale price of $607,900. For the same period last year, the seven sales in East St. Paul averaged prices of $552,800.

The lowest average condominium sales price this year has been in the MLS® area making up the easternmost area of the West End and West Broadway. There have been nine sales so far at an average price of $104,044.

The Canadian Real Estate Association’s House Price Index, which is the most accurate representation of price trends across the country, shows Winnipeg's benchmark apartment condominium price at $226,600 for the end of August 2024. Its highest price was in June, when it was only $600 higher at $227,200.

Contrast Winnipeg’s steady condominium market pricing with the Greater Toronto Area, where the benchmark apartment price in April 2022 was $782,600. In August 2024, it had fallen by more than $100,000 to $667,700.

The highest benchmark apartment condominium price in the country is in the Greater Vancouver Area, with a price at the end of August of $768,200.

It is worth noting that Linden Woods, as noted above by Jeremy Davis as Winnipeg’s second most active condominium sales area in 2024, is also showing a very impressive conversion ratio of 95 per cent of its listings to sales (80 out of 84). There are few MLS® areas as good as this inside or outside Winnipeg and the overall conversion ratio for the entire condominium market is 67 per cent. This conversion level of two out of every three listings selling is on par with residential detached properties in 2024.

While the number one selling condominium area is Osborne Village, its conversion ratio of listings to sales is 57 per cent, 10 per cent points fewer than the overall average.

Finally in this regard, improved listing conversions can make a world of difference to sales performance, as is evident downtown this year. Just two more listings were entered in Winnipeg’s downtown MLS® area for the first nine months of 190 than in the same period in 2023, yet sales have dropped from 78 to 65 this year. If the downtown were to just achieve a 50 per cent conversion ratio, sales would be at 95 – 30 more than they are now.

In conclusion, continued steady performance is expected in the last quarter of 2024 and comes close to matching the second busiest condominium sales year, 2022.

Pricing is expected to remain firm and could finish the year as the highest average condominium sales price on record.