Winnipeg’s new fees could lead to smaller homes and condo sales
WINNIPEG – The growth fees unveiled last week at City Hall could lead to a long term trend of smaller homes within the city limits, pushing people who want larger homes into bedroom communities in the Greater Winnipeg Area, according to Ventura Land Company, a prominent real estate development company with active projects throughout the region. It could also lead to a rush on condo sales as people race to buy before unit prices go up by $10,000 to $15,000 or more.
“Consumers have a budget and it’s tighter than ever. Every time we add a cost to a house or a condo, then consumers trade for something else,” said Tim Comack, Ventura’s Vice President of Development. “If you want a detached house within the city limits, then you’ll be building something smaller, which will ultimately have a lower assessed value. If you want a larger house, you’ll be looking outside the Perimeter Highway.”
Ventura is building new subdivisions in La Salle and Stonewall, but also has new condo projects in Osborne Village. The company is also one of the largest single family builders in the province. While the company sees the new fees as a potential boon for those Greater Winnipeg developments, it has concerns about how the proposals will affect its future Winnipeg projects.
“Our La Salle and Stonewall subdivisions already offer huge financial savings to consumers and we’ve seen growing demand for them due to larger lot sizes, much lower lot prices and lower overall home ownership costs on things such as property taxes and utilities,” said Comack. The new fees would add much more than $18,000 to the base cost of a new home within the City of Winnipeg. You have to add in builder margin, higher down payment costs, higher GST and higher realtor commissions, and the cost of the average 1,800 square foot home could rise upwards by $25,000. We think the decision to drive an extra five or ten minutes for a larger, less expensive house will be an easy one. We also think that consumers will be forced to consider smaller homes, and reduce the quality of materials and finishes, if they elect to build inside the city.”
For condo projects such as Ventura’s 24Seven building on River Avenue, Comack says he expects buyers will likely rush into the market before the fees are imposed. 24Seven is an infill 48-Unit condo development in Osborne Village that is already under construction. Comack points out that any projects launched in 2017 and beyond will now have to charge up to $10,000 more per condo. So, now is the time to buy if you are looking.
“We understand the city is trying to achieve long term fairness and balance, but we need to contemplate what the net effect of adding these fees will do to assessed values of homes built over the long-term,” said Comack. “This could end up pushing families outside of the city where they can find the larger homes they desire. It could also put negative pressure on building new in-fill condo developments and drive further density into suburbia where lots may continue to shrink, and homes will get even smaller.”
-Tim Comack, Ventura Land Company Inc.