The Winnipeg housing market was hot in 2021, representing different opportunities for both buyers and sellers. In November 2021, the average selling price of a property was $355,765 – a seven per cent year-over-year increase. There was also a four per cent increase in overall transactions. Selling prices for detached, attached and condo properties all increased between seven and twenty-one per cent.
Winnipeg’s housing market may change in 2022, depending on many factors including COVID-19 and continued demand for properties. If you’re currently renting and looking to purchase a property, especially in a market as hot as Winnipeg’s, you’ll need to have a plan. Here are a few ways to help you save for home ownership.
Follow The Local Market
What kind of property do you want to live in? Do you want something you can fix up to make your own, or more of a turnkey property? Do you want to maintain a yard or pay fees to have your snow shovelled for you? What kind of neighbourhood do you want to live in? What amenities are important to you?
These are all important questions to consider before buying a property. However, thinking about those questions and looking at them showcased on real properties are much different. That’s why it’s important to keep an eye on the housing market to understand what’s out there for you.
There are many different types of properties available in Winnipeg – detached houses, condos, townhouses and duplex homes. Many are listed and sold each month. Connect with a real estate agent for access to Manitoba’s Keystone Matrix, a database for homes on the market. Even before you’re ready to put in an offer, look at the properties advertised each month to see which ones you would want to live in. Take special note of properties in your price range (more on that in the next section) and which areas and types of properties are the most popular. If you don’t have a realtor, you can check out homes and create watchlists on www.realtor.ca.
Make A Budget
When buying a property, you’ll need to combine the type of property you want with one you can afford. Especially if you’re not in a position to immediately afford a down payment, calculate the gap between where you are and where you want to be financially.
Take note of your savings, income, debt, expenses and any other important credits or debits. Use a mortgage calculator and estimate what you can afford for a down payment. The minimum down payment for houses under $500,000 is five per cent if you are a first time home-buyer. If you can afford a down payment of 20 per cent or more, you won’t have to pay mortgage loan insurance, which will reduce your monthly expenses.
If you need to find some extra room in your budget, you may want to redirect retirement savings – such as RRSPs – on a short-term basis. A first time home-buyer can redirect up tp $15,000 from their RRSPs towards the purchase price of their home, so long as it is repaid back into their RRSPs over a 15 year period. This may not be a wise decision for everyone, but if you’re many years away from retirement and only redirect retirement funds for a short period of time, the move could help you get closer to your goal of owning property. This also applies to any other savings goals like travel – putting that on hold temporarily to focus on saving for purchasing your property could be helpful.
Another great way to find room in your budget is to reduce your car use or choose another method of transportation altogether. If you live close to work, you can walk, bike or ride the bus and save thousands of dollars each year on gas, insurance, car loans/lease payments, parking and vehicle maintenance. To learn more about the true cost of commuting, check out this blog.
Build Good Credit
It’s important to prioritize your credit health. Your credit score will be a crucial factor when you’re getting pre-approved for a loan and the bank is deciding your interest rate. These decisions can make long-term impacts on how you pay off your property.
If you have outstanding student loans, credit card bills or other debts, pay those off as quickly as possible. While it may seem backwards to save money by spending more money, having less debt will help you long-term. Along with paying off old debt, don’t rack up any new debt – be responsible with your spending and keep a close eye on your credit cards.
Reduce “Fun” Purchases
Shifting your savings around and paying off debt look and feel like big financial moves. But reducing little, everyday purchases can also make a big difference. Some easy things to cut out are takeout food, alcohol, domestic travel and entertainment expenses.
You don’t want to deny yourself these simple pleasures for too long – they’re part of what makes life exciting and fun. But a short-term commitment to tightening your budget can make the difference between getting the home you want and having to sacrifice in key areas.
If you’re finding it difficult to reduce spending, you could look for a part-time job to supplement your income.
Find An Investment Partner
If you can’t afford to purchase a property on your own, don’t worry. A trusted partner, family member or friend could make a great investment partner. The most traditional partnership would be to split the mortgage.
However, you could also look for someone to live with while you’re saving for a down payment to reduce rent costs. If you have someone who’s willing to help you reach your financial goals in any way they can, purchasing a property becomes a lot easier.
If owning a property in Winnipeg is your dream, now is the time to plan and make it reality. The best time to start is today. For those wanting to create their dream from scratch, Paragon Design Build creates custom homes. You can view our recent projects
on our Build page.
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