Vol.10:1 Winnipeg, Hottest Real Estate Market in Canada?

You may have heard that real estate markets have been cooling off, but that’s only true in select segments of the least-affordable cities in Canada, Vancouver and Toronto chief alongst them. Here in Winnipeg, one of the last bastions of “affordable” cities in the country, the opposite is true.

Last year at this time, Winnipeg was 1 of only 4 remaining major cities in Canada* that still had a sub-$400,000 market, consisting mainly of pre-war and war-time houses, early bungalows from the 1950s-1970s, townhouses and condos.

This year, it is down to just Winnipeg and one other - Regina. But even though we still have housing options under $400,000, we are fast losing the best of them – the early bungalows.

The general pricing guide for Winnipeggers currently shopping for a basic 1950s-1970s 1000 square foot, 3-bedroom bungalow pretty much starts at $400,000 and goes up from there:

Straight and solid but outdated = $400,000ish;

Straight and solid and cosmetically updated = $450,000ish,

A ll of the above with the extra visual appeal of a cathedral ceiling or something like that and maybe a garage thrown in = $500,000ish, and

$500,000+ if the square footage is larger, the lot is stellar in some way and/or there is a double garage.

Buyers who started their search last year and are still looking are noticing that prices are noticeably higher now. 11% higher, actually, according to MLS stats. In fact, would you believe that Winnipeg is currently tied with Quebec City as the hottest real estate markets in Canada? How that doesn’t make the news is a mystery to me.

Who is getting the shortest shrift in this market? Everyone shopping with a ceiling of $400,000 and especially those with a budget of $250,000 or less. There’s almost nothing in that lowest range anymore that isn’t being gradually reclaimed by the earth.

Because of our soils, there aren’t that many straight and solid homes amongst the oldest housing stock, so the ones that are command a premium. But straight and solid needs to be a perquisite not icing on the cake. I would urge anyone shopping in this range that doesn’t have mad reno skills to consider the condo market and soon, because that market is starting to heat up, too, as more Buyers get squeezed out of the housing market.

Who is the least affected by this market? Buyers with a budget of $550,000 or more. There is low inventory in this price range, too, but the quality and value proposition is predominantly high with fewer competitors. “Overpaying” at this end of the spectrum doesn’t have nearly the consequences of doing so at the lower end.

Who can make the best use of this market? Homeowners who want to trade up. There are so many buyers competing for smaller, older, lower-priced homes that sale prices get pushed disproportionately high. Case in point: an outdated 1050s 926 SF 2-bedroom bungalow with a poor layout listed at $349,900 last week in East Kildonan and sold for $430,000 because it was straight and solid and had a decent double garage. That is $40,000 - $50,000 more than it would have sold for 6 months ago.

What’s driving this market? The short answer is, record-low inventory that has been getting increasingly lower ever since the pandemic.  There was a pause in 2023-2024 when the world felt like it might be returning to normal and homeowners that had been putting off listing their homes took the leap. More properties came to market, which cooled down the competition somewhat and resulted in a bit of a contraction in sale prices.  Then Trump 2.0 came along and all of the uncertainty that has ensued has would-be Sellers sitting it out on the sidelines again (or still).

Is there any relief on the horizon? It’s going to depend on how many new properties come to market over the next couple/few weeks.  It’s encouraging that 37 new listings have come on-line in just the last 2 days alone - if that continues, competition will be divided amongst  a handful of properties instead of all buyers piling on just one property at a time, and prices will settle down a little.

Is there any way to make a savvy purchase in this market? Yes. By prioritizing good bones and a high value proposition over cosmetic upgrades – things you can’t change over things you can. Here are 3 options to consider:

1.       Find a straight and solid house with a high value proposition and “overpay” for it. Bear in mind that every $5,000 of mortgage adds roughly $30/month to your monthly, so focus on the monthly amount when deciding what’s “affordable”.  Think big picture - there are ways to set up your mortgage so that the amount you “overpaid” in the beginning will be recouped over time.  I guarantee you that by investing in a property with a high value proposition, you will one day laugh at how insignificant your initial “over payment” was in light of how quickly it will have appreciated.

2.       Find a straight and solid duplex with a high value proposition and live on one level while renting out the other. Banks will typically use half of the rent money you collect to help you qualify for the higher cost of a duplex. In exchange for giving up the exclusivity of a single family dwelling and for taking on the obligations of a landlord, you get a better quality of housing stock and help paying off your mortgage. Think of it as the side gig that pays down your mortgage for you. Or, hire a property management company to deal with all that – the cost will be a tax write-off.

3.       If your budget is too tight to buy that straight and solid house, then find a straight, solid and well-managed condo development with a high value proposition and invest your home-buying dollars there for the time being. The appreciation isn’t currently what it is in the housing market, but every mortgage payment creates equity for you and you have much more control over your  environment and expenses as an owner than you do as a renter.

Every situation is a little different, of course. If you want to discuss yours and what options are available to you in this market, please get in touch - I’m always in the mood for brainstorming, scheming and talking shop.

Cheers! Wendy

*along with Saskatoon, Regina and Edmonton.