July MLS® sales results showed a continuation of a second quarter of brisk market activity, according to the WinnipegREALTORS® month-end report.
The association reported that condominium sales stood out in July, recording a 32 per cent increase over July 2016.
Total July Multiple Listing Service® unit sales of 1,438 went up six per cent when compared to the July 2016 level and the 10-year July sales average.
It was the second best July on record, with only July 2014 eclipsing it by three per cent.
July’s dollar volume of $416 million was the first time the month reached and surpassed $400 million in sales transactions.
“Initial concern this year about tougher mortgage requirements affecting sales activity is being overcome by strong demand for all property types,” said Blair Sonnichsen, president of WinnipegREALTORS®.
Among the concerns was the stress-test imposed on Canada Mortgage and Housing Corporation (CMHC)-insured mortgages with less than a 20 per cent down payment.
But as of July 12, when the Bank of Canada increased its trend-setting overnight lending rate from 0.5 to 0.75 per cent, the five-year lending rate used to stress-test mortgage applications was at 4.64 per cent, which is unchanged from a year earlier.
That said, Canada’s major chartered banks have recently raised advertised five-year fixed mortgage interest rates by one-fifth of a per cent to 2.84 per cent, which translates into an increase of $50 per month on a $500,000 mortgage loan ($60 per month on a $600,000 mortgage loan, etc.).
“I cannot emphasize enough that in our local market we have different affordable options to choose from,” added Sonnichsen. “Buyers are taking advantage of the options through REALTORS® keeping them informed and current on all the properties available on our MLS®.”
Year-to-date MLS® sales of 8,508 units at the end of July were slightly ahead of last year’s record-breaking pace, while dollar volume at nearly $2.5 billion was up five per cent over the same period in 2016.
A new release of 2016 Statistics Canada Census, which provides breakdowns about families and household make-up, shows Winnipeg and its CMA (surrounding municipalities) have grown faster in population over the past five years than the national average. Moreover, the number of private dwellings occupied in the city of Winnipeg and surrounding rural municipalities has ratcheted up to accommodate increased population demand for housing.
“These increases, in combination with low unemployment numbers and low mortgage rates, are creating favourable conditions for sustained housing market activity,” said Sonnichsen.
“Proof of how well we are performing this year is our higher conversion of sales to listings in comparison to 2016,” he added, “when there were 420 more MLS® listings entered by the end of July.”
The listings drop this year is almost entirely attributed to residential-detached properties, whereas other property types, such as condominiums, have seen their listings either in line or greater than 2016.
The most active price range for residential-detached sales in July was from $250,000 to $299,999, with 23 per cent of total sales. The $250,000 to $274,999 and the $275,000 to $299,999 price ranges represented 10.95 per cent and 12.20 per cent of market activity.
The closest to these price ranges were $225,000 to $249,999 and $300,000 to $324,999 at 8.55 per cent and 8.26 per cent, respectively.
In what is one of the best month performances ever for condominiums at 207 sales, the most active price range was from $150,000 to $199,999 with 27 per cent of total sales. The next busiest price range for condos was from $250,000 to $299,999 with 18 per cent of total sales.
“Our Realtors and mortgage professional members are succeeding in helping buyers navigate through a more difficult mortgage qualification environment in 2017, “said Marina R. James, CEO of WinnipegREALTORS®. “You should be working with them to understand and determine what your best course of action is with respect to purchasing a home in our local market.”