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Winnipeg’s Real Estate Market: Is it a bubble waiting to burst?
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photo credit to Bernat Casero on flickr
Recently, Winnipeg REALTORS® released their November real estate report, indicating record breaking sales and dollar figures. (Here is a look at my report on Winnipeg’s Real Estate Market ). That same day, the Winnipeg Free Press issued a story on this report, which can be viewed online here. Basically, sales are up, dollar volumes are hitting record highs, etc etc….. but someone commented on the article “I’m waiting for the bubble to burst.”
Maybe it’s because Winnipeg has always been a conservative city, maybe it’s because people are used to the decades of ‘zero-growth’ real estate, but this ‘bubble-talk’ is non-productive at best. Back in 2007 we heard predictions that the “bubble-will-burst”. At that time, a 3 BR bungalow in the St Vital area was being sold for the outrageous price of $150,000, and a side-by-side in the Maples sold for (gasp) a cool $100K. ‘Crazy’, ‘Nuts’, ‘Foolish’ were the comments being made at that time. “Winnipeg’s Real Estate Market is a bubble, and the bottom will fall out soon. I’ll wait and buy a house when it does.”
Of course, to be fair, no one has a crystal ball, and if we could go back in time, who wouldn’t pick up a half-dozen little bungalows in River Heights for around 40K each right about now?
Where is Winnipeg’s Real Estate Market today?
That same 3 BR bungalow in St. Vital will now, most likely, command an extra $100K, and side-by-sides have routinely sold for over $200K (that’s PER EACH side). In fact a 1000 sq ft bungalow in Fort Richmond (VERY nice home, to be sure), just sold for over $300K. “Crazy”, “Nuts”, “Foolish”? Time will tell.
Is Winnipeg’s real estate market a bubble? The shape of a bubble would suggest that the market is over-inflated, will burst and prices will drop back down to pre-bubble levels. There are several reasons why I, personally, don’t think that will happen. Unemployment in Manitoba is exceptionally low, as are interest rates. Immigration is high, as is migration back into Manitoba. These are all indicators that housing will continue in strong demand, well into 2011.
In addition, while we have a strong growth at approx. 10% on average, we are not seeing the 40-50% spikes of other provinces, growth with can not be sustained over the long run. If the past is any indication, rather than a bubble, Winnipeg’s Real Estate Market is probably shaped like the up-slope of a steep embankment, and once at the top, the land will level out, rather than drop off dramatically.
No, this growth of Winnipeg’s Real Estate Market can not continue forever, but if you are looking to buy a home, waiting for “the bubble to burst” may not be the best strategy.
Related articles
- Winnipeg Condo Market Report for December 2010 (bokauffmann.com)
- Winnipeg Real Estate Market Update for December 2010 (bokauffmann.com)
- How do Winnipeg Property Assessment values compare to actual Market Value? (bokauffmann.com)
- Canada Real Estate Roundup (vancouverreflections.com)
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I write this from my Android phone from your mobile version of this site in Vancouver and all I can say is try the prices here. People have been saying “bubble” here forever.
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