WINNIPEG — After years of bidding wars driving up prices, balance is returning to the Winnipeg housing market.
“We haven’t seen the same type of price increases in Manitoba as we have in Toronto, Montreal. Prices are increases but they are in balance,” Canada Mortage and Housing Corporation’s Dianne Himbeault said Tuesday.
On Tuesday, the Bank of Montreal announced it is cutting its posted interest rate for a five year, fixed mortgage from 2.99 % to 2.79 %.
READ MORE: BMO cuts one 5-year mortgage rate to 2.79% from 2.99%
In Toronto and Vancouver, the average price of a single detached home just topped $1,000,000. That’s where some analysts are warning of a looming correction.
In Winnipeg, the average house price is 275-thousand dollars, and that’s expected to remain the same in 2015, despite historically low interest rates, just in time for the spring market.
“So while BMO is pushing the envelope it remains to be seen if the other big banks will be introducing such staggering discounts to match them,” Penelope Graham, Editor at Ratesupermarket.ca explained.
The rate reduction comes as the Bank of Canada warns about rising consumer debt levels. The low mortgage rates across the country may encourage buyers to take on more debt and buy a more expensive home.
According to debt experts, that may be not the right option. “If things are so tight that an extra 100 dollars a month is going to put you over the edge , then that means trouble for Manitobans,” Bruce Caplan from BDO said Tuesday.
READ MORE: Canadian home prices to fall 40-50 per cent, financial author says
And Real Estate Agents know, historically low interest rates have only one direction to go.
“Interest rates going up are inevitable at this point, there as low as they are ever going to be. Will the interest rates going up effect the market? For sure,” Ed Dale Jr. said Tuesday afternoon.
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