The city has seen few of the affordability woes facing first-time homebuyers in markets such as Toronto and Vancouver
While mortgage rule changes arriving next month are expected to improve the housing affordability outlook for first-time buyers, plenty of work remains to make purchasing a home a realistic prospect for most Canadians.
Extending the option of a 30-year mortgage amortization to all first-time buyers and anybody purchasing a new build, as well as a hike in the mortgage insurability limit to $1.5 million, are measures the federal government hopes will ease some of the woes experienced by those hoping to get their foot on the property ladder.
But while first-time buyers in major markets like Toronto and Vancouver are seeing their plans dashed by eyewatering home prices, prospects for new entrants to the market are significantly better elsewhere – not least Winnipeg, Manitoba.
In September, purchasing a home required an income of about $77,600 in Winnipeg, according to Ratehub.ca, compared with nearly $200,000 in Toronto and almost $220,000 in Vancouver.
That’s helped spur a market with plenty of opportunity for new buyers in Winnipeg, according to Caily MacGregor (pictured top), a broker with One-Link Mortgage and Financial based in the city. “We’re one of the rare markets in Canada where it’s still affordable for first-time homebuyers to get into the market with 5% down,” she told Canadian Mortgage Professional.
“There’s a lot of opportunity for young buyers to get into the market here and [they’re] definitely taking advantage of that, which is great to see. Our home prices don’t fluctuate like we see in the big markets, so it’s reassuring for buyers when they’re not seeing those big swings and it’s more of a consistent investment when they’re looking at making a home purchase.”
How will mortgage rule adjustments impact the Winnipeg market?
The city’s affordable housing costs have also seen investors and out-of-province individuals turn their attention to its property market, presenting challenges for some new buyers now facing greater competition with higher purchasing power.
Still, overall prospects for first-time buyers remain strong – and while the insured mortgage cap increase will have next to no impact on Winnipeg’s housing market, the introduction of longer amortizations is a step that MacGregor said could have a material impact. “The 30-year amortization is a very nice option, especially for those single-income earners,” she said.
“We still do have some of those here that can purchase homes and condos with minimum amounts down – 5%, 10% – and having that flexibility to go to 30 years, I think, is really important with the cost of everything going up. People are looking at having manageable payments but still wanting to get into the market. So that 30-year will help people bring their payments down and keep them relatively comfortable until they’re able to increase payments or put extra payments against their mortgage or anything like that.”
The period between January and July saw the number of residential sales across Winnipeg’s housing market spike by 10.2%, with RE/MAX expecting that figure to have jumped by a further 5-6% by the end of the year.
How are current homeowners handling the renewal wave?
A significant talking point in the mortgage market across Canada is homeowners renewing their mortgages at higher rates than before, a trend that’s only expected to intensify next year and in 2026.
Bank of Montreal (BMO) senior economist Robert Kavcic anticipates that Canada’s so-called "mortgage renewal wall" over the next two years will act as a “modest headwind” rather than a major disruption for most Canadian homeowners.https://t.co/bCNlKpCKLK
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 14, 2024
An education-driven approach is essential for brokers in that climate, MacGregor said, especially for those borrowers who are concerned about the prospect of higher payments or who don’t want to face the difficult discussions.
That uptick in renewals and improving sentiment across the country as a result of Bank of Canada rate cuts and the prospect of further drops down the line point to a busy market in store for 2025. “I’m seeing a lot of those [renewal] conversations happening already and preapprovals and leads coming in at a time that’s not normally super busy,” MacGregor said. “Usually we see this pickup in February for the spring market.
“So we could see the spring market heat up pretty good over here in Winnipeg, and I expect that the market’s going to be better than 2024.”
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