Should I wait to buy a home?
I have been asked this question a lot over the past year-and-a-half, and my short answer is this: If I could predict the market, I would be retired by now! However, we can look at longer trends to get a sense for what is going on in our real estate market.
As we know, some of the factors fuelling the dramatic (approximately 18%) increase in real estate prices over the past year-and-a-half include the following:
Incredibly low interest rates allowing investors to change models and move quickly in acquiring new assets, renovating, and developing.
Lower than average supply on the market creating longer than normal wait times for new construction and new developments (some new home builders are booking 18 months in advance)
International investing: Personally, I have seen a rise in foreign investment into our market, and a number of single family homes have been converted to multi-family rentals in the infill game. I have been told that some international investors are now setting their sights on Winnipeg as a good (and safe) location to invest their money in real estate as Winnipeg is still the best priced major city in Canada!
Looking at the long game:
Since 2005, our Winnipeg market has nicely plodded along at about a 4% year over year increase. And, other than the sub-prime lending crisis in the States, we have not seen a consistent and long-term devaluation of the market (since 2005 the longest downturn was about 7 months in 2008-2009).
As a result of these numbers and the types of continued increases we see in other major Canadian markets (please see above graph for Toronto HPI - approximately 10% increase per year over the last 10 years... and, as anecdotal evidence - my sister bought a row-house on Dundas street in Toronto 10 years ago for $425k and now she could sell this house for $1.15-$1.2m!), Winnipeg real estate continues to be an underpriced asset on the National market. We could see these numbers continue to rise - unless instability is introduced to our market, foreign investment is minimized or disallowed, or the increase in consumer and household debt becomes too much and our market gets flooded with assets that can no longer be carried.
However, we have not seen these alarming things happen in Canada (to date) but Covid also continues to be the wildcard in it all....
Once again, if I could predict the market, I would be retired! However, I figured I would at least provide some introductory information as a means to welcome a conversation. I love chatting about real estate... and renovations!
Thanks for reading!