Happy April 1st!

MARKET UPDATE

The average home price in Winnipeg being $436,231 for the first quarter in 2024 is not an April Fools joke. Unless you are a buyer…then you might have some nervous laughter. Unlike other market updates I have done something different for this one. Since most people are not interested in the selling price of homes in the more crime ridden areas of Winnipeg, I have removed three neighbourhoods from this month's market update. Thus the average sale price of Winnipeg does not include sold homes in

1. The North End

2. Point Douglas

3. Spence

I also removed $1 million + homes as they are skewing the results both in terms of average price and average Days on Market (DOM)

SOLD HOME DATA Q1 2024

*removed $1,000,000 sold homes

**removed neighbourhoods

What does this mean?

New construction is having a harder time selling compared to resale properties. If you don’t live in the Winnipeg south end you wouldn’t know that the area of Bridgewater that is currently selling all of the new construction has a very close proximity to the Brady Landfill. I have been monitoring the new construction in this area for a couple of years and the builders prefer to sell the properties in Winter or early spring while the landfill smell is not as potent as it is in the summer. The problem is that if you want these new construction homes in the other areas of the south end, you will be paying a significant premium for the location. Real estate is all about location, location, location, remember? 

I have also noticed that the first time home buyer demographic is having a hard time with the limited supply in the area and that if you are shopping under that $400k mark it is probably prudent to have a conversation with your Realtor to start looking at properties at a lower price point so that you can compete. The competition is even more fierce in the under $300k price range. In order to best service my clients that are shopping in this price range, I have been working closely with my clients’ lenders. This allows a more collaborative approach to understanding how we can strategize to maximize the down payment amount without adding more stress to my clients monthly living expenses.

CHANGES TO THE REAL ESTATE WORLD

One of the biggest changes is that while the foreign home ownership ban was supposed to expire at the end of this year they have extended the ban until January of 2027. While there are plenty of exceptions to this rule, which we will cover in a minute. If you are a new immigrant to Canada you will have a harder time acquiring a home. This extension of the ban has been met with a lot of push back as Canada’s current immigration policy means that rental units are going to be in extreme demand as we force the new 1 million plus immigrants into exclusive rental situations. There are exceptions if you are on a student or work visa but you have to meet a list of requirements such as history of filing Canadian taxes, being present in the country for at least 244 days, etc. I also wanted to clear up that this ban does not apply to non-residential units. So anything with 4 or more units is considered fair game for non-canadians. This has led to a lot of speculation as to whether the ban is actually doing anything to help affordability in the housing market as foreign investors can still purchase large development projects. I also think this speaks to how much of our real estate is owned by foreign entities. 

Another new change coming to Winnipeg this spring is that as of April 1st 2024 the new short term rental or Airbnb ban is coming into effect.

1. Accommodation Tax - STR owners will now be taxed at 5% for any bookings on their property. This is the same tax that applies to hotels. The implications of this is that most Airbnb's will now have a 5% increase in nightly rates.

2. Booking Limits - Anything less than a 28 day stay is now considered short term. Following the new policy change you will now be limited to only being able to rent out your primary residence on Airbnb or VRBO.This means that current Airbnb’s will need to be repurposed unless you were operating a property as a STR before Feb. 23rd 2023. If you were operating STR's before the February date last year, you can have up to 3 STR's NOT including your primary residence that are grandfathered into the new restrictions.

3. License Requirement - In order to obtain a legal STR you now need to apply for a license from the City of Winnipeg to operate within the city.

4. Locals Only ✈ - All of the previous conditions can only be met if you, or your corporation that owns the properties, are WHOLLY owned in by residents of the City of Winnipeg. Personally, I would like to see the city of Winnipeg expand this criteria to either Manitoba residents or Canadian residents.

Winnipeg does not really have a huge tourism scene so while this may not have an immediate impact it does hurt the small tourism that we do experience. 

If you have not filed your taxes yet you may want to research the new capital gains tax for property flipping. In the past when you sold a primary residence you were not taxed on the capital gains. Regular capital gains tax is 50% of the gains are taxed at your regular income tax rate. Now, if you sell your primary residence within 365 days of purchasing it you will now have 100% of your gains taxed. This is not really a huge needle mover as most homebuyers don’t sell within the first year. It would be interesting to see how much more tax dollars from capital gains the government gets this year compared to the previous years to see if implementing this legislation was worth the effort. 

LOCAL EVENTS THIS APRIL

April 2nd - Noah Kahan @ Canada Life Centre

April 12th - April 14th - Jurassic Quest @ The RBC Convention Centre

April 20th - NHL Playoffs start! Go Jets!

April 21st - Mini Pop Kids Concert @ The Burton Cummings Theatre

April 27th - Candlelight concert tribute to Queen

April 30th - Start of the Winnipeg Comedy Festival

A lot of people have been asking me about the city of Winnipeg’s property assessments and how that works so I figured I would help explain it.

Every two years the city of Winnipeg will use a mathematical model to determine a property’s estimated market value for the purpose of calculating the property taxes of that property. The assessed value is based on a three year rolling average of the year 2 years prior to the assessed date. For example, the proposed 2025 assessed values are based on the April 2021-April 2023 sold data for similar homes. 

⚖ While the assessed value can be a good reference point for understanding a home’s value, the assessed value is not the market value. The market value is based on recent sales (usually within the past few months) to help determine a property’s worth. The assessed value is intentionally delayed so that the city can adjust the mill rates (for property taxes) rather than adjusting the value of everyone's property.

✨ Another important thing to consider is that the assessed value does not consider the condition of the house or the finishes of the house. Obviously the condition of a property is going to affect the market value so the assessed value should never be taken as a guarantee in potential sales price. 

In recent years the assessed value has been below the market value due to the dramatic appreciation in housing. However, there are cases where the assessed value is below the market value because the city has not re-assessed that house yet, or there are not enough recent sales to reflect the true appreciation of a neighbourhood. 

If you are a buyer and want to understand if you are overpaying or underpaying for a property your real estate agent will help guide you through that process. Similarly, if you are a seller and you are wondering what your property is worth, a real estate agent or appraiser can walk your property and give you an estimate based on the market value and not the assessed value.

If you are curious to know what your property is worth or you are just starting to think about buying a new property and are unsure what the market is like, reach out to me and we can discuss all your questions so that you don’t have to enter the market uninformed.