Throughout the past couple of years, Winnipeg has had a lot of variation in transactional levels, but our real estate market has seen a steady increase in property prices.
The average home for sale is priced higher than we’ve ever seen: detached homes, attached homes, and condos have increased between 5%-14% (YTD-May, 2022).
Has this negatively impacted real estate in Winnipeg?
When compared to the same months in previous years, June marked the fourth month in a row with higher MLS® sales during the spring market.
Thankfully, we’re starting to see a shift within the market; with more properties being listed, sellers have to be realistic about their prices and expectations.
Winnipeg is still in a seller's market, but we can expect a gradual shift throughout the year.
The 1,797 sales that were completed in June 2022 increased by 3% over the 5-year average for this month but were down 7% and 5% from the two years prior.
A total of 2,867 new listings, a 21 percent increase from June 2021 and a 9 percent increase from the five-year average. The significant increase in June listings results in a month-end inventory of 3,477 listings, a 25% increase over the corresponding month in 2016.
It will be interesting to watch the development of real estate in Winnipeg over the next few months.
If the increased level of houses for sale doesn’t level out average house prices, how will that affect real estate in Winnipeg?
Specifically, will the distinction between luxury houses and standard homes start to soften?
What is considered luxury real estate?
Luxury realty isn’t defined by a price alone, as most buyers think.
Since neighbourhoods, cities, countries, etc., have different competing rates for buying properties, it wouldn't make sense to categorize luxuriousness by just the listing price.
Let’s take a look at real estate in Winnipeg…
Currently, the average price for a detached house is approximately $420,000. Which as we noted, is the highest average price point the city has ever encountered.
When you browse an MLS database that has luxury real estate listings in New York, you will find an easily attainable price tag of $80 million.
So, a two-million-dollar house in Winnipeg might seem luxurious, but only when you’re comparing it to our specific market.
When determining what is luxury real estate you have to consider the location, square footage, valuable materials, expert design, high-end amenities and prestigious history.
Sustainability has become a crucial factor for luxury houses; which can be credited to Millennial buyers.
Other features that contribute to upscale homes are technological innovations, specialty rooms like a theatre, dressing rooms/expanded closets, outdoor kitchens and living spaces.
In the event that you’re listing a home for sale, discussing the branding of your property is imperative. The best realtors will determine accurate descriptions and decide if your home falls into the luxury category.
Marketing for Luxury Real Estate Properties
The fundamental procedure for selling a luxury property is theoretically similar to that of a conventional home; however, the marketing strategy, ad language, and digital assets created specifically for the luxury property frequently differ.
The time frame for creating the marketing often has to be expanded as well. However, the following crucial elements must not be disregarded:
- Pricing remains crucial, and frequently there aren't many comparable sales. The key to pricing well is having an agent who has visited the competition, is willing to phone other agents for information, and spends hours upon hours massaging the data. Make sure your agent has connections in the market for luxury homes.
- Stage preparation is essential. Many people appear to believe that by exclusively listing their home, they are spared from having to worry about staging, etc. We believe it to be the exact reverse, nevertheless. If your house is labelled as a luxury, buyers will expect opulence throughout the space, including the furniture, decorations, etc.
- A promotional plan is key. Selling your house through an exclusive route or advertising it through an MLS listing, still requires an in-depth and strategic promotional plan. All efforts must be maximized: persuasive writing, high-resolution photos taken in various stages throughout the day, virtual tours, and prosperous connections. In many cases, a realtor will find a direct buyer instead of advertising with an MLS listing.
- Timing always affects the sale. Any market is impacted by a wide range of circumstances, so it's important to have a plan for your property that will leverage seasonality.
Luxury realty descriptions need to support your promotional material like high-quality photos and virtual tours.
Buyers are notoriously visual, but your target audience is highly educated and knowledgeable. They will want supporting facts to endorse the listing price.
To craft a compelling description for a high-end property:
Frame the story carefully
Hook the reader with your introduction
Pay attention to your vocabulary
Relate written content to photos/videos
Include facts like renovation prices, neighbourhood specs, etc.
Is luxury real estate a good investment?
With any investment, you have to weigh the definitive factors contributing to your ROI.
There are a few paths to pursuing a luxury real estate investment depending on whether you're buying a house to live in temporarily or to sell as soon as possible for a profit:
Remodel a mansion
Buying luxurious condos
Purchase a luxurious vacation home
Finish a unique construction
To determine the best suitable path for your investment:
- Identify your favoured results. Earning a return on your investment is the aim of any real estate investment. The outcome you want should be taken into account while choosing luxury residences. For instance, you might concentrate on flipping if you want to make a rapid profit. A luxurious apartment or vacation house would be suitable if you desire a steady income.
- Plan your funding. Cash is not always the most appropriate solution, even if you have it on hand. For instance, if you want to finance a flip (that will be completed in a few months), a hard money loan might be the best option.
- Investigate multiple markets. Make sure the market will support your decision before making an expensive real estate investment. Examine the labour market, living expenses, median household earnings, and the region's economic prospects. Consider the year-round and peak-season traffic if it will be rented.
Luxury real estate frequently has steeper ups and downs than normal property purchases, even though real estate is generally thought to be stable. The entry point, or the time you decided to buy inside a market cycle, is important because of this.
It's also crucial that a wealthy investor refrain from using excessive borrowing and is able to keep the investment property long-term, weathering any instability.
Therefore, luxury real estate can be a good investment as long as you’re calculated with your approach.
If you’re new to luxury property investments, starting with a highly desirable destination is your best option. There are only so many “best locations” in the world and Canada especially.
These locations are sure to recover if there is a backlash on your investment, but it can be a long game. In some cases, you won't see a turnover for 10-15 years. Which can ultimately have a better result than selling under pressure.
How much do luxury real estate agents make a year?
The average real estate commission rate in Manitoba is 4%–6% of the property's sale price, which includes both the buyer's agent and the seller's agent fee.
In Manitoba, 90% of real estate brokers divide the commission equally between the buyer and seller agents.
This means that if the overall commission rate is 5%, then the buyer agent will receive a 2.5 percent commission and the seller agent will receive a 2.5 percent commission (also known as a listing agent).
This stays true to luxury sales as well, but the commission fee is usually closer to 4%.
A home valued at $3 million with a total commission fee of 5%, will make each realtor $75,000 (buyer and seller).
Keep in mind, that the realtors have to pay out taxes, their brokerage fees, marketing expenses, and a great deal more.
It’s hard to indicate an accurate salary average for realtors, especially agents who specialize in luxury.
According to ZipRecruiter, the average salary in the United State is $113,347. In Canada, it’s $114,861.
Seems a bit low, hey? An average salary is hard to indicate because realtors determine their salary.
That average salary could include part-time agents, the portion of their luxury revenue only, or include cities that are low-demand for luxury properties.
To make $39,800, you can sell:
20 homes with a $2,000 commission
10 homes with a $4,000 commission
4 homes with a $10,000 commission
2 homes with a $20,000 commission
Who owns the most expensive house in Winnipeg?
We’re not going to tell you who, but we can let you know which house in Winnipeg had the most expensive listing price.
Head on over to 1063 Wellington Crescent in Winnipeg to see the most expensive house–or–should we say, mansion?
Originally listing at $11 million, it was reduced to $9.9 million and it’s currently listed at $8,499,900.
The art-deco and European-style mansion was custom built in 2006 it has 6 bedrooms, 11 full bathrooms plus 4 partial, indoor and outdoor pools, a guest house and 1.7 ac of land. It’s a waterfront property with lush landscaping and incredible entertaining features.
We can’t compliment the architects and designers who worked on 1063 Wellington Crescent enough. It’s truly Winnipeg’s most elite residence and hits all of the luxurious marks:
Location: waterfront property in a highly sought-after neighbourhood
Square footage: massive property at 1.7 ac.
Expert design and amenities: absolutely stunning art-deco features with numerous amenities like the indoor/outdoor pool, jacuzzi, fitness center, spa-inspired bathrooms, grand balconies, etc.
Specialty rooms: wine cellar, theatre, guest house, etc.
Winnipeg Luxury Homes for Sale
When we compare above-average homes to luxury residences, the differences are apparent. Although, the rising listing prices can have you second-guessing rankings.
Homes for sale in Winnipeg with desirable neighbourhoods, modern touches like an outdoor pool, spacious yard, etc., and are listed at over $700K can seem luxurious and they truly are to some buyers.
Although, if the realtor is describing it as a luxury real estate opportunity on their MLS listing, they’re misinforming buyers. A true luxury property stacks against Winnipeg’s most expensive home.
It has incomparable amenities, is grand in size, and hits all of the points we previously mentioned.
Make sure your investment is true to value by partnering with an exceptional realtor who has a vast knowledge of luxury real estate in Winnipeg.
The team of agents at Ed Dale is fully equipped to answer your realty questions and help you achieve your dream investment property by finding the most compelling luxury homes for sale in Winnipeg.