Interest Rates and the Winnipeg Real Estate Market Winter 2023

At the time of writing this, we are at the eve of the next Interest Rate Announcement. I’ve been asked to comment a fair bit on the Winnipeg market, and where I think things are headed. The underlying concern behind every question I seem to receive, is the impact that interest rates are having on affordability.

My Prediction for Tomorrow: RATES HOLD. It would appear that the target inflation rates are on track for 2024.

The Bank of Canada has a few goals when we see policies as aggressive as we have this year. Namely:

  • Inflation reduction
  • Creating the appearance of instability and uncertainty, so consumers slow their spending.
  • Higher debt repayments reducing discretionary spending power
  • The feeling of "doom" tomorrow - so we hold onto our money today
  • Based on the conversations I have been having, I would say it feels certain that the market is feeling just that!

The largest concern is over interest rates. And I get it. According to Royal LePage, 3.4 million Canadians plan to renegotiate their mortgages in the next 14 months – and inevitably, most of them will be at higher rates. A recent poll also revealed that nearly 75% of homeowners are anxious about these upcoming changes. First, interest rates are higher than we have seen in the last decade – and I get that is scary. They have also jumped at a more aggressive pace than we have previously seen. Also scary. BUT, we have to remember WHY…. Anytime you see a period in which the Government begins printing money as they did during the pandemic, there is more money in the market to play with. As a result, spending increases, prices go up. The low interest rates made spending, particularly on housing, incredibly popular. There was now more cash in the market, low interest rates, and many behavioural shifts too as a result of new lifestyles brought on by a pandemic (working from home, needing a home gym, not needing to be as close to the office, etc.).

Home prices increased (a huge contributor to GDP) and inflation increased. The pandemic was unprecedented, but periods of high inflation were not – and the government did just as it should – it started to increase interest rates to slow down spending and get inflation to a more manageable level. So, we went from a target overnight rate of 1.25% in March of 2020 to a target overnight rate of 5% in July of 2023. There is no denying that this was a HUGE increase, and those with variable rate mortgages started to feel the crunch. There is also no denying that MANY people elected to lock in for fixed mortgages when the rates hit new lows in 2020, and many of those renewals will be coming up in 2025. Statistically speaking, Canadians like the security of fixed-rate mortgages with nearly 74% electing for one and 49% electing for 5-year terms. This was true even before these historically low interest rates of 2020. So yes, things are going to change, but I do want to highlight a few things:

  • History gives us a great deal of context, when we look to it and beyond what has happened over the last 3(ish) years. For instance, if you look at a history of 50 years of interest rates, did you know that you are actually coming out ahead in Canada, if your variable rate mortgage is below 6.8 percent or your five-year, fixed mortgage is below 8.6 percent? That is an historical average, taken over 50 years. In theory, anytime we are obtaining mortgages for less than 6%, we are doing okay.
  • NOW, not the end of your renewal term, is where you need to start looking at the numbers. Run the numbers now. Remember there will be principal paydown to take into account so the amount you will be mortgaging SHOULD be less than what you started with. Discuss with your lender what the payments will look like at current rates. My advice – if they’re going up, it isn’t a bad idea to get used to the idea now and feel if it’s comfortable for you. Many mortgage policies will allow you to pay off up to 20% of the principal every year, so try paying that higher rate between now and your formal renewal. Not only are you paying down your mortgage faster, you’re getting a sense of how comfortable those mortgage payments are for you and your lifestyle!
  • There are other options, too beyond just selling your home. Twenty-four percent of Canadians plan to extend their amortization period.
  • Some have said they plan to switch lenders – approximately 23%, but keep in mind that if you do so you have to requalify for the stress test.
  • Some may end up downsizing, and that’s okay too. You need to do what is comfortable for you.
  • Some will get creative. Perhaps take on a tenant to help offset costs
  • But let’s look at the flip-side of the coin. When interest rates were lower, buyers flood the market. Even a small decline in interest rates starts to increase buyer confidence. Which means, bidding wars, low inventory, and more. In my opinion, I would always prefer to buy in a market when nobody else is buying. Those investments are the ones that have performed the best for me, long term.
  • Rents have also been increasing in Winnipeg, and fairly substantially. Vacancy rates are low so this market also remains competitive.
  • Stress tests were instituted in 2016 for just this reason. To ensure that there is buffer in those mortgage rates.
  • Keep in mind that money was being given to us, for nearly free. When, in history, have we been able to borrow money at rates far below inflation…Many economists are seeing that we will never see the rates of 2020 again (I’ll never say never, but I agree it won’t be anytime soon).

On the Winnipeg market in general:

Winnipeg maintains its status as a stable yet predictable real estate market. While we might not have the flashy headlines of some other cities, our market consistently chugs along, usually on an upward trajectory.

For the past two decades, Winnipeg has been undeniably characterized as a Seller's Market. Since 2004, we've consistently witnessed remarkably high absorption rates, even as interest rates began their ascent in 2022. In August 2023, MLS sales recorded a 2% increase compared to the previous year and a concurrent 2% rise from July 2023. With the recent announcement by the Bank of Canada to maintain the Overnight Rate, there's every reason to believe that this upward trajectory will persist.

As vacancy rates have declined, they've exerted upward pressure on average rents, pushing them above the national average. Interestingly, while average rents have climbed, the average sales price for a residential detached home in Winnipeg remains approximately half of the national average. Consequently, the allure of buying in Winnipeg has grown significantly, appealing to both local buyers and out-of-province investors.

Our condominium market was the one exception to the upward trending market over the last decade. It experienced either declines or nearly stagnant sales for several years. However, we are now seeing renewed strength and nearly twice the volume of sell-through that we experienced pre-pandemic. Sales prices have surged by 5% this year, standing 10% above the five-year average. As the pandemic continues to wind down, I anticipate this resurgence will continue, marking an exciting time for condominium owners who have longed for gains in their equity, akin to their counterparts in the residential market.

A major driver in the Winnipeg market is also positive net migration, which we have continued to see in 2023 and those numbers plan to increase 2024-2026 according to the most recent Canada Immigration Levels Plan. Combine this with the lift of the Foreign Buyer Ban in 2025, and the market is likely going to remain on the long-standing upward trajectory.

And IF the market were to experience a year of decline it has in the past – the market has always surpassed that decline in the subsequent year. If history is any predictor of future behaviour, those that can hold longterm will be just fine.



top realtor in winnipeg, jennifer queen#AgentJen

Jennifer Queen

Phone: (204) 797-7945


Categories:   #AgentAmy | #agentAshton | #AgentLogan | 48 Hour Time Clauses in Winnipeg Manitoba, | 55 plus condos for sale winnipeg | agent | agents | airbnb winnipeg | basement flooding | benjamin moore | best agents | best real estate agent | best real estate team | best realtor | best realtor winnipeg | best realtors | best winnipeg realtor | bidding wars | bidding wars in winnipeg | bridgwater | brookfield relocations | buyer representation | buyers | Buyers, Rent, Realtors, Winnipeg | buying a condominium | buying a home | buying a home in winnipeg | buying a home with a pool | buying a house | buying in winnipeg | buying winnipeg | children activities | client appreciation | closing costs winnipeg | colouring contest | condo for sale in south winnipeg | condos in winnipeg | corona | Corona Virus | Coronavirus | cost of buying a home | country living | covid-19 | documents for selling a condo winnipeg | downsizing in Winnipeg | exclusive listing winnipeg | exclusive listings in Winnipeg | fair square | fairsquare winnipeg | families helping families | faq | financing conditions | First Time Home Buyers | first time home savings account (FHSA) | for sale by owner | for the kids | foreign buyer ban | Fort Garry | Fort Richmond | Giving Back | Goal setting | holidays | home buyers | Home buyers winnipeg | home buying | home buying tips | home buying winnipeg | home maintenance | home ownership | home ownership winnipeg | home sellers | Home sellers winnipeg | home selling | homes for sale | HomesForSale | house hunting | house hunting trip winnipeg | houses with pools | how to buy a home | interest rates winnipeg real estate | Investing in Property in Winnipeg | investing in winnipeg real estate | is a pool a good investment winnipeg | lake front properties | life lessons | listings | living in winnipeg | living on the red river | luxury homes | luxury houses winnipeg | Luxury Listings in Canada | luxury real estate in winnipeg | Luxury Realtor in Winnipeg Manitoba | luxury realtor winnipeg | manitoba | market predictions | mls | motivation | moving to the country manitoba | moving to winnipeg | pandemic | Permits in winnipeg | pool homes winnipeg | pools in winnipeg | purple bricks | queen team | real estate | real estate advice | real estate agent | real estate agents | real estate family | real estate in Manitoba | real estate life | real estate team | real estate teams | real life | Realtor | realtor life | realtor reviews | realtor tips | Realtoring | realtors | realtors who care | realtors winnipeg | redecorating | relocating to winnipeg | remax realtor commission rates | REMAX winnipeg | renovating | renovations with the best ROI | rental equipment | riverfront property winnipeg | riverfront winnipeg | royalwood | rural living manitoba | sage creek | selling | selling a condominium | selling a home | selling a home in winnipeg | selling a home winnipeg | selling advice winnipeg | selling during the holidays | selling privately | selling real estate | selling winnipeg | Selling Your Home | sherwin williams | should i buy a house with a pool | should you buy or sell first winnipeg | south drive winnipeg | spring home maintenance tips | staging a home in winnipeg | staging advice | staging in winnipeg | Summer camps in winnipeg | Summer camps in winnipeg 2023 | summer camps winnipeg 2024 | Team Update | things to do in winnipeg | tips for buying a home | top real estate team | top real estate team winnipeg | top realtor | Top Realtor Team | top realtor winnipeg | top realtors | top realtors winnipeg | transcona | Underpricing a home in winnipeg | water in basement | waterfront homes winnipeg | waterfront winnipeg | what to do in winnipeg | what to do on possession day | whats up | Windsor Park | windsor park winnipeg | winnipeg | winnipeg and interest rates | winnipeg houses | winnipeg manitoba | Winnipeg R | winnipeg real estate | winnipeg real estate market | Winnipeg Realtor | winnipeg realtors | Winnipeg Sellers | winnipeg top realtors | winnipeg, remodeling, | writing an offer | Year in review

Our website has been designed with the intention of providing you access to the Best Realtor in Winnipeg -by this, we mean the best Realtor for you and your needs, although we do strive to be the best real estate agents in Winnipeg based on our customer service, follow-up care, and customized services for our clients. Not only that, but we offer access to agents that specialize in every quadrant of the city. We have a real estate agent for Sage Creek, a real estate agent for Windsor Park, etc. So if you are looking for a neighbourhood expert, just contact us to see who would be the best match for you and your search! If you are looking for a top realtor in Winnipeg, then look no further. You have found us!

We have created several pages to help you navigate through your search and narrow down key areas of interest. Whether it be Sage Creek Real Estate, Windsor Park Real Estate, Fort Garry Real Estate, Transcona Real Estate, Luxury Real Estate, or just Winnipeg Real Estate in general, we have got you covered. Do you feel we are missing a community that would be of interest to you? Let us know, we would love to add information that our clients find useful!

Jennifer Queen Personal Real Estate Corporation