Winnipeg Real Estate News Updates - October 2021

October 5, 2021 | Posted by: Ron Chan

Winnipeg Real Estate News Updates - October 2021

Is there anything new you need to know?

It’s been over a month since our last Winnipeg real estate news update, but now that autumn has arrived it’s time to see what’s new (if anything) as we enter the final fiscal quarter of the annum. Should buyers get a mortgage before 2021 comes to a close, or wait until the new year? Let’s have a look and see what’s happening in the world of Winnipeg real estate.

Recent Developments in the Winnipeg Real Estate Market You Need to Know About as of October 2021

Sharp Rise in Bond Yields Increased Fixed Rates (but not a big deal)

After over a year of sitting at historical lows, fixed mortgage rates experienced a bit of a hike this past week. This is/was the result of an increase in mortgage funding costs that came from a recent 34% rise in bond yields. Fixed mortgage rates are directly tied the Bank of Canada’s actions in the bond market. Thus far, CIBC, HSBC, and TD have increased their fixed rates. For most buyers, the change is negligible. For instance, CIBC increased their 5-year fixed (high ratio) rate from 1.99% to 2.19%, and their standard 5-year fixed rate from 2.24% to 2.36%. TD’s have shift from 1.89% to 2.19% and 1.99% to 2.29%, respectively.

It’s important to note that before the economic bust that came from government enforced lockdowns, buyers would be chomping at the bit to get a 5-year fixed rate under 2.4%. Please do take these recent increases with a grain of sugar. Plus, the Bank of Canada just announced that they would continue supporting the bond market and have pledged to keep doing so in order to keep fixed interest rates low. This has not changed, so don’t expect fixed rates to rise much further. Ultimately, fixed rates remain extremely favorable. We can’t say with confidence that this will persist in early 2022. Get pre-approved to lock in to your preferred rates today.

Data Source: Canadian Mortgage Trends, Oct 4/2021

Variable Mortgage Rates Aren’t Budging

Fixed rates may have experienced a short hike, but variable rates are staying put. They are directly tied to the Bank of Canada’s overnight rate and that isn’t changing any time soon. Average variable mortgage rates remain at around 1.5% and this will likely persist through all of 2022. The Bank of Canada’s earliest rate hike is not anticipated until 2023. While this news may prompt you (as someone who favors variable rates mortgages) to wait until 2022 to buy a home, it may not be a good idea to pause much longer. Read below to find out why.

Bidding Wars Break Out in Winnipeg

We’ve been very vocal about how Winnipeg real estate inventory is tightening. Buyers flooded the market through 2020-21 to capitalize on low borrowing rates and affordable pricing. And now, we’re seeing bidding wars break out across our neck of Southern Manitoba. Single detached homes are in short supply and this is driving prices up. The Winnipeg Regional Real Estate Board reports that the average sale price of a single-family homes has increased to $380,000, which is up from $341,000 in 2020. But even with fairly dramatic year-over-year increases, the affordability (compared to the rest of Canada) and attractiveness of Winnipeg real estate (peppered by a low cost of living) has kept interest high. That is why bidding wars are ensuring. Sure, sales have stabilized after breaking sales records for 13 consecutive months, but that was absolutely expected. Inventory simply could not sustain any more sales records. But here you are, a buyer entering the Winnipeg market, and are wondering if you should wait for 2022 unfold. If in the market for a single detached home (vs a condo) don’t wait. New detached developments will not become available until 2023 at the earliest. But don’t worry, your dream home is still out there, you just need to know where to look, and realize what your buying power truly looks like. View more on how a mortgage broker can help you buy a home in a low inventory market. or simply call Ron Chan today at 204.290.9950 to get the ball rolling. The time to act is now.

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