'The trend has certainly gone up': Over 40 homes in Winnipeg sell over $1M each year
Nearly 700 homes assessed at over $1M, but only 4 located in the north
It wasn't until 1996 that Winnipeg saw its first home sell for over $1 million.
Over two decades and a sustained real-estate market boom later, more than 40 homes in that price range sell each year in Winnipeg, according to the Winnipeg Realtors Association.
And while most of these luxury homes have been located in the city's traditionally wealthy neighbourhoods, such as Wellington Crescent, Old Tuxedo and along South Drive, increasingly they are appearing in newer suburban neighbourhoods.
Peter Squire, the spokesperson for the association, says many factors explain the rise in luxury homes.
"The cost of construction has gone up significantly in the last few years … the lot plus the materials and all the amenities and bells and whistles that discerning buyer wants is bringing these homes up to that price over a million dollars," he says.
Squire says he noted an unusual increase in million-dollar developments happen in the months preceding the city's new impact fees, which adds $500 of cost for every 100 square feet of new residential space.
"They were moving up their plans to [build] expensive homes … because they were wanting to avoid the impact fee," says Squire.
That said, Squire says obviously Winnipeg's price point pales in comparison when one looks across the country.
"The trend has certainly gone up, but when you compare us to cities like Calgary and Edmonton, there's still far more million-dollar priced homes," he said.
Currently, the most expensive home ever listed in Winnipeg is for sale for $9.9 million. The home was previously listed in 2015 for $11 million. Squire says that if this home sells at that price, it would obliterate the current record of $2.7 million.
In 2012, Premier Brian Pallister — then an opposition leader — purchased a $2-million dollar mansion on Wellington Crescent nestled on a 1.7-acre riverside lot with estimated annual property taxes of $38,000. At the time, this was the second-highest residential real-estate transaction in Winnipeg's history.
Owners taking out bigger loans
Rob Swan, president of Huntington Homes, a Winnipeg-based custom luxury home builder, says low mortgage rates play a big role in the growth of luxury real estate.
"Interest rates are low so people are taking out larger mortgages," Swan says.
He says while older generations may have had the goal to pay down the home in 20 years, today many home buyers are more concerned about what they can afford cash-flow-wise from month-to-month and not necessarily expecting to live in the home for the entire mortgage term.
With 30 years' experience in the industry, he also says building inflation itself is driving many homes over the million-dollar mark.
"Twelve years ago we built a nice big fancy house with all the toys in it, and maybe it cost somebody seven or eight hundred thousand dollars. And today that same house is going to cost a million two," says Swan.
He says evolving building codes, six-inch framing, tariffs on drywall, cost of land are all behind the increased price tags. In addition, evolving tastes and less conventional trends in home design are having an impact on the pocket book.
"Technology has gotten better, so people are putting in larger windows because it's not as inefficient from an energy point of view," he said.
Squire says we tend to think of luxury homes as having dozen of bedrooms and tens of thousands of square feet similar to homes in established neighbourhoods, but the reality is that some of the most expensive homes in Winnipeg are less than 4,000 square feet, but are jam-packed with luxury amenities and designs.
North vs. South
In terms of assessment value for the purposes of property tax, there are just over 670 home in Winnipeg that are above the million-dollar threshold. However, these homes are largely concentrated in the southwestern portion of the city.
If one splits the city in half using Portage Avenue and Dugald Road as the rough boundary line, only four of the 670 million-dollar homes are located in the north.
However, this is likely to change as new developments in The Maples neighbourhood continue to grow.
