RISING house prices have eroded Winnipeg’s international standing as an affordable place to buy a home, a new study has found.
The Frontier Centre for Public Policy’s Fifth Annual Demographia International Housing Affordability Survey, released on Tuesday, ranks Winnipeg as the 80th most affordable city among 265 international housing markets surveyed, and tenth most affordable among 34 Canadian cities.
While its new Canadian ranking is only one notch below last year’s ninth-place finish, its international ranking is 51 notches below last year’s 29th-place standing.
David Seymour, a Regina-based analyst with the FCPP, blamed the drops on a combination of things.
They include the growing local demand for housing, which puts upward pressure on prices; plunging house prices in the United States and in some Canadian cities; and the addition of 36 more markets to this year’s survey. Some of those additions were smaller cities where housing is usually less expensive.
But the biggest contributing factor was rising house prices in Winnipeg. Seymour said a severe shortage of homes for sale sparked numerous bidding wars among prospective buyers, which drove up selling prices and eroded affordability. And while a market correction drove down house prices in many overheated markets in 2008, they continued climbing at a double-digit pace in Winnipeg.
“But this is not a bad news story for Winnipeg,” Seymour said. “People can still afford to buy houses and pay their mortgages.”
He also noted Winnipeg is still the most affordable market among Canada’s 10 largest cities.
The FCPP study examined the cost of housing in the third quarter of 2008 in 265 cities in Canada, the United States, the United Kingdom, Ireland, Australia, and New Zealand.
Winnipeg was one of 87 markets ranked as affordable. Another 74 were ranked as moderately unaffordable, 49 as seriously unaffordable and 64 as severely unaffordable, with the Sunshine Coast of Australia being the worst.