Land prices, rent control shift developers' priorities away from affordable homes
"In 2011, Winnipeg residential housing sales topped $3 billion, a record, and individual unit sales were 14 shy of the 2007 record year," Squire said. "Over the past 10 years, we've had the tightest market in the country, with lower days and higher sales."
In regard to average time on market, Winnipeg has been trending three to four weeks on average, Squire said. "We have been under 30 days for the last seven years. Inventory is just 1.5 to 2 months."
The question is, why doesn't Winnipeg just build more homes? The answer is complicated, but most of the causation can be laid to a couple of reasons.
First, back in the early 1990s, Canada experienced a serious economic meltdown and it wasn't until the tar sands oil industry and other commodity businesses started to accelerate growth and the country's gross national product (GNP) began to skyrocket. Winnipeg and other Eastern provinces lagged the growth in places like Alberta and British Columbia, so builders and other tradespeople migrated west.
"Winnipeg builders are doing what they can, but they have only so many trades that can build so many homes," Squire said. "They are going flat out."
Froese agreed, saying, "They are building pretty fast, but there is a shortage of trades. Last year, if you wanted to build a house, you had to wait a year."
Secondly, lots have gotten so expensive that builders are for the most part constructing high-end homes.
"Everyone is building new homes, but no one is building starter homes," Froese said. Those higher-end homes are being gobbled up quickly, which is why the average new home in Winnipeg is bumping $400,000, almost $150,000 above the average cost of a home in the city.
The problem is that most immigrants are looking for those modest-priced starter homes, which leaves Winnipeg's housing market in a conundrum. Yes, the new higher-end homes are being scooped up, but the market needs starter homes as well.
"Many immigrants that are coming have jobs," Froese said. "When you have people and you have jobs, you have people buying homes. That's the driving force in Winnipeg's real estate market."
However, immigrants need the right-priced homes to buy, or to rent, and the market is not responding. That's an immigration problem the United States could use.
Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on Amazon.com.
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