Are World’s Best Housing Bargains Here?

Frontier Centre, Housing Affordability, Media Appearances, Uncategorized

WINNIPEG real estate has long been renowned as a bargain in Canada, but a new study says it’s also one of the most affordable housing markets in much of the world.

For the typical Winnipeg house hunter, buying a home takes an estimated 2.4 years of salary. The only other cities where houses are less expensive in proportion to income are Buffalo and Rochester, both in New York state, says the study released yesterday by the Frontier Centre for Public Policy.

Even with the cost of the average Winnipeg home jumping 12 per cent last year and 30 per cent in the last three years, Winnipeg remains the top-ranked Canadian city for housing affordability and it places third among cities in England, New Zealand, the United States, Australia and Canada. Realtors said Winnipeggers should quit whining about booming real estate prices — and enjoy them.

“You can’t even come close to buying a house in Toronto for the price you’re paying here,” said Walter Boni, president of the Winnipeg Real Estate Board.

“People who are coming from other cities look at the city as being very affordable… we’re still amongst the cheapest (in Canada) even with the increases that we’ve had.”

Edmonton and Quebec City also make the cut, tying for 14th place out of 20 cities estimated to have the most affordable housing markets.

“This is a great thing for Winnipeg,” said Wendell Cox, the lead author on the study, who is based in Illinois. The list of the most expensive housing markets is dominated by west coast cities like Los Angeles, San Diego, San Francisco and Vancouver.

“The chamber of commerce should be touting that all over the world, especially with the terrible trends that are going on in Vancouver,” said Cox.

According to the author of the study, an average property in an affordable market should take less than three years of average household income to purchase before taxes and carrying charges.

The figures are tabulated using census data and information collected from local real estate boards, as well as numbers supplied by national banks.

In Winnipeg, where the median house price is listed as $118,000, and the median household income is estimated to be around $49,000, it would take just over 2.4 years to purchase a house if all income was saved.

Compared to the 6.6 years it would require in Vancouver, or the 11.2 years estimated to be needed in Los Angeles, Cox said prospective nesters in high-cost cities have a big problem. “In the last decade, we’ve seen an unprecedented escalation of housing prices relative to income,” said Cox. “Those kinds of numbers never existed before. The reason they exist today is because there are land shortages that have driven the prices of houses up.”

The study says that, of 100 markets surveyed, 42 markets are termed as “severely unaffordable,” for taking the typical worker at least an estimated five years to purchase. Only 24 markets are stated to be “affordable,” including three Canadian cities.

For families that have fled price gouging, Winnipeg’s 30 per cent rise over the last three years doesn’t look so bad.

“If you compare prices right now, the prices in Vancouver are going up like crazy because of the Olympics (in 2010), even in the suburbs,” said Yvonne Blouin, who moved from Surrey, B.C., this September.

“Downtown Winnipeg compared to downtown Vancouver is really cheap. For the suburbs, the difference isn’t as huge though.”

The 37-year-old mother of three moved to Winnipeg this September from Vancouver after her husband’s sudden job transfer, and examined about 25 properties before purchasing a home in Island Lakes.

Buying a five-bedroom home set her and her husband back about $280,000, but Blouin said she bought the Winnipeg house when the price was right.

With young children underfoot, and her mother moving in with the family to be a caregiver to the kids, Blouin said a spacious spot was necessary.

“We looked at some gigantic homes outside the Perimeter Highway that were only about $300,000 or $350,000,” said Blouin. “They were gorgeous, but everybody warned us we’d be crazy to move outside the Perimeter. The one we got is great.” The Blouins’ Surrey house sold for $335,000. It came with a 90-minute drive during rush hour to work every morning.

Not everyone’s enamoured of Winnipeg’s fame as an affordability destination.

Peter Squire, market analyst for the Winnipeg Real Estate Board, said there’s still a ways to go on property taxes, which are not factored into the study.

“When you start factoring in our high property taxes to other jurisdictions, that certainly makes our housing more expensive,” said Squire. Squire pointed out 50 per cent of property taxes went to school boards.

“If we weren’t so reliant on property taxes, the affordability equation would be much more appealing,” he said.