Real estate is sizzling in Winnipeg - breaking new sales records every month this year and forecast to continue its fevered pace well into 2006.
The Winnipeg Real Estate Board's sales through its multiple listing service (MLS) passed the $1 billion mark in early August - a level that has never been reached so early in the year since the board began operations 100 years ago.
"There have been double-digit price increases during the last three years," says public affairs director Peter Squire. "But I don't know if we've ever had as strong a year as this one. It is said that interest rates may go up in the fall. Since we've heard that before, we expect the boom to be sustained well into 2006."
The market's strength, and the heightened exposure afforded by the MLS website, may be attested to by two indices: The average days on the market fell to 21 this year, from 40-50 in previous years. As well, the sales-price-to-list-price ratio is reaching 100 per cent, up from 95 per cent in previous years, according to Squire.
The market is booming across the country, but due to having the lowest built-up inventory among Canadian cities, Winnipeg is right up there at the top. This is having a considerable multiplier effect on building, renovations, furniture sales and the economy in general.
The Canada Mortgage and Housing Corp. (CMHC) predicts that Manitoba will be the only province to increase housing construction this year and the next. Population growth is still ahead of growth in housing stock, generating pent-up demand. Other factors favouring home purchases in Manitoba include relatively low interest rates and unemployment, consumer confidence and a strong economy.
The luxury home segment is outselling low-cost houses for the first time.
Rochelle Blumenthal, a retired library technician, sold her Manitoba cottage to her daughter and son-in-law last year. "The deal took about six months to crystallize and, during that time, the cottage appreciated in value 20 per cent more than the price I had agreed to sell it for," she recalls.
Manitoba's net population inflow of 5,000 during the last year is primarily due to immigration. Many immigrants make immediate contributions to the economy via purchases of a car and home. Population growth leads, in turn, to growth in retail sales as well as tax revenues.
This has also led to a construction boom. Private investors Joe Paletta, CEO of the Paletta Group, and Joe Bova of Man-Shield Construction are planning to turn the abandoned Canada Packers site at St. Boniface into a $70-billion recreation complex, the country's biggest. They say things are progressing slowly in the right direction, but are reluctant to comment at this stage.
The athletic park would include indoor pitches, 18 outdoor soccer fields, bike paths, a skateboarding park, golf links, rock-climbing walls, speed-skating ovals and hockey rinks.
A local landscape architecture firm has made concept drawings, and federal funding for the 171 acres may be in the offing in the fall.
Meanwhile, Ron Evans, grand chief of the Assembly of Manitoba Chiefs, has expressed an interest in building an Aboriginal legislative assembly and training centre on the urban reserve he would like to see on part of the site.
(Ashoke Dasgupta can be reached at dasgupta@businessedge.ca)