Winnipeg Free Press

Winnipeg Free Press (Newspaper) - June 06, 2012, Winnipeg, Manitoba C M Y K PAGE B5 BUSINESS EDITOR: STEVE PONA 697- 7264 business@ freepress. mb. ca I MARKET DETAILS B6,7 I winnipegfreepress. com WEDNESDAY, JUNE 6, 2012 B 5 I T was like a tale of two cities last month in Winnipeg's resale homes market, with wellheeled buyers jockeying with bargain hunters to make the most noise in an already red- hot market. Not only did Winnipeg Realtors set a record for the most million- dollar homes to sell in a month - five - but more price- conscious buyers were also snapping up duplexes and townhouses like they were going out of style. The association said sales of single- attached homes - such as townhouses and row houses - soared by 77 per cent to 62 from 35 in May 2011. And sales of duplexes weren't far behind, jumping by 68 per cent to 28 from 17 a year earlier. " That is a lot for one month," said Peter Squire, the WR's residential market analyst. Squire and other industry officials said it seems to be mostly first- time buyers and rentalproperty investors who are scooping up duplexes and townhouses. " I think some of that is a flight to affordability," Squire said, noting the average selling price for a single- attached home, year- to- date, is $ 203,000 versus about $ 270,000 for a singledetached property. " And certainly the investment element is there, alive and well, given our tight rental market," he said, referring to Winnipeg's 1.1 per cent apartment vacancy rate. Robin Sherman, a duplex- sales specialist with Re/ Max Associates, sold five of the 28 duplexes that changed hands last month. She confirmed the buyers of the five wellmaintained properties were a combination of first- time homeowners and rental- property investors. She said three of the five properties were in central or north Winnipeg, on streets such as Polson and Church avenues, and two were on Cameron Street and William Newton Avenue in Elmwood. All five sold within a week to 10 days of hitting the market. " I must have had 20 showings on Polson alone," Sherman added. " It was crazy." Sherman and Winnipeg Realtors president Shirley Przybyl said duplexes are an attractive option for first- time buyers because they can live in half and rent out the other half. " The idea of living in one half and having the other half pay your mortgage is fantastic," Sherman said. " It's always been fantastic." She said it was unusual for her to sell that many duplexes in a month. She noted she only sold one or two over the first four months of the year. All five were properties purchased by Vancouver investors in 2008, when Canada Mortgage and Housing Corp. was still allowing people to buy homes without a down payment. " It was just a crazy time. We were falling all over each other trying to find ( investment) properties to buy." She said they all signed four- year mortgages that were expiring this year. They decided to sell while the market was hot, and they all pocketed a nice profit. For example, the owner of the 2,200- squarefoot Cameron Street duplex bought it for $ 229,000 and sold it for $ 301,000. " I warned them they were paying top dollar back then ( in 2008)," Sherman said. " But the market has just gone up and up, and prices have gotten so much better." Przybyl said escalating property values are one of the reasons for the record number of million- dollar- plus homes that changed hands last month. There are a lot more of them now than a few years ago, when many would have still been priced at under $ 1 million. WR data show there are 32 such properties listed for sale on its Multiple Listing Service. Przybyl said some months the association is lucky to see even one million- dollar- plus sale. The previous record was three in a month. The most expensive home to sell last month was a newer, 3,200- square- foot home in south Headingley's Assiniboine Landing, which sold for $ 1.2 million. Squire said the other four - two in East St. Paul, one in Germaine and one in St. Andrews - all sold for $ 1 million or a little more. They helped the WR set a record for dollar volume of sales in a single month, at $ 411.4 million. And the 1,605 unit sales was the second highest May total on record. murray. mcneill@ freepress. mb. ca LOCAL builders are on a tear this year, despite building- permit activity hitting the proverbial brick wall in April. Statistics Canada figures released Tuesday show only $ 168.2 million worth of permits were issued in April by Manitoba municipalities. That was a drop of 25.8 per cent from March's $ 226.7 million. But despite April's slowdown, permit values were still running 49.6 per cent ahead of last year's pace after the first four months - $ 790.1 million versus $ 528.2 million. And 2011 was a busy year for the province's construction industry. The figures show permit values in Manitoba have been fluctuating wildly from month to month this year, with one big month followed by a substantial decline the next month. Some economic forecasters had predicted a slowdown in construction this year as a number of big projects near completion and cashstrapped governments cut back on infrastructure spending. But Winnipeg Construction Association executive vice- president Ron Hambley said last month all of the evidence he's seeing points to another busy spring and summer for the industry. " We track projects two to three years out, in terms of where they are in the design stages," Hambley said. " We use that as an indication of how busy the next six to eight months are going to be... and we're very encouraged." The Statistics Canada figures also show while the non- residential sector was the laggard in April - permit values plunged 48.5 per cent to $ 63.6 million - it was the runaway leader over the first four months combined. Non- residential permit values soared by 109 per cent to $ 348.1 million from $ 166.6 million in the same period last year. And residential permits increased by 1.2 per cent in April - $ 104.6 million versus $ 103.6 million - and by 22.2 per cent for the first four months - $ 442 million versus $$ 361.6 million. Nationally, the value of building permits issued last month slipped 5.2 per cent to $ 6.5 billion, mostly because of lower construction intentions for institutional buildings and multifamily dwellings in Ontario. After two consecutive monthly advances, the value of permits in the non- residential sector fell 8.4 per cent to $ 2.7 billion. The value of residential permits dipped by 2.8 per cent to $ 3.8 billion in April, a fourth consecutive monthly decrease. - Murray McNeill, with files by The Canadian Press House market burning hot Duplexes, $ 1- M homes snapped up By Murray McNeill Builders keeping busy despite slide in permits THE Winnipeg Convention Centre is the centre of organizational efficiency in the country this week with about 750 passionate adherents to lean techniques attending the CME National Lean Conference. Once considered the exclusive purview of manufacturing - specifically production - lean is becoming more accepted as an important tool for the improvement of any organization. Generally, the term " lean" represents the concept of how to be efficient and effective in producing the highestquality products or services - and the most innovative - at the lowest prices. Norman Bodek - sometimes referred to as the godfather of lean - said the latest development in the teaching of lean concepts is taking the ideas and applying them to individuals. Bodek's former company, Productivity Press of New York, was the first English- language publisher of about 100 Japanese books on productivity, including the field's superstar authors, Shigeo Shingo and Taichi Ohno. Now 79, Bodek, who lives in Vancouver, Wash., writes his own books on the subject and has travelled extensively, visiting the most efficient companies in the world. The latest Japanese star in the field Bodek is championing is Takashi Harada, a junior high school track- and- field coach in Osaka, Japan, who developed the Harada Method. " It is a step- by- step methodology to take underachievers and make them winners," he said. It's fitting some of the English- speaking world's leading teachers and authors of lean strategies were in Winnipeg as the city has become a hotbed of lean activities. One of the most celebrated examples in the city is Price Industries, makers of air- distribution products and services, including a vast array of grilles, registers and diffusers. Gerry Price, the company's founder, spoke at the conference about how his business grew, even as his market shrank during the biggest recession of our generation. " I think it was probably the best presentation I have ever heard in my life in the lean arena," Bodek said. " I think his company is the best I have seen in the West, comparable to the best Japanese companies." That's music to Ian Marshall's ears. Marshall is the lean champion for CME Manitoba ( Canadian Manufacturers and Exporters). " A lot of organizations, when they start on lean, start in production," Marshall said. " What Gerry has done is go beyond operations. It's the way you do development and sales and marketing - the whole enterprise. A lot of companies don't get that." Over the years, Marshall and his group at CME, with the help of provincial funding early on, have established more lean consortia per capita than anywhere else in North America. Part of the success of a lean project - probably an essential ingredient - is a visionary leader. Marshall credits Monarch Industries' chief operating officer, Roy Cook, with kick- starting the work in Winnipeg, as well as Canadian lean- training experts such as David Chao of Vancouver and David Hogg of Kitchener - both of whom are at the Winnipeg conference. Asked why more companies don't adopt lean techniques, Chao said, " Companies just don't want to spend the money. You have to learn by doing - you have to fail, then succeed with the whole process before you become a leader of lean." Hogg, who was presented with the Queen Elizabeth II Diamond Jubilee Medal at the conference, is credited with popularizing lean consortia, where companies from different fields collaborate on best practices. There are seven such lean consortia in Winnipeg. " Winnipeg is unique in the world," Hogg said. " The dynamic here is tremendous." The CME National Lean Conference continues until Thursday. Paul Soubry, CEO of New Flyer Industries, will talk about New Flyer's process of building a competitive culture today, and one of the biggest selling authors in the field, Jeffrey Liker, is speaking Thursday morning on the Toyota way to lean leadership. martin. cash@ freepress. mb. ca OTTAWA - The Bank of Canada is holding off on raising interest rates for a while longer - perhaps a lot longer - citing worsening global conditions and an uneven Canadian recovery that is not quite as strong as advertised. The decision to keep the bank's trendsetting overnight rate at one per cent for the 14th consecutive policy announcement was widely expected. Also not surprisingly, the Bank of Canada has quickly acknowledged the hopeful monetary policy review delivered by governor Mark Carney in April may have been premature. In a more pessimistic take, Carney and his policysetting council conceded in Tuesday's announcement the outlook for global growth has weakened in the past few weeks, and Europe has gone from a risky environment to one in which the risks are now reality. " This is leading to a sharp deterioration in global financial conditions," the bank said in a statement accompanying its rate announcement. As if on cue, Spain sent out a distress signal prior to Tuesday's emergency G7 finance ministers' conference call, which included Canada's Jim Flaherty, saying it was having difficulty accessing credit at affordable rates. Meanwhile, an emergency conference call of G7 officials to discuss Europe's worsening debt crisis has drawn vows of action from the continent's representatives, according to reports from some capitals. But there were few details and Flaherty, who participated in the high- level call, along with Carney, would not take questions on the issue. - The Canadian Press Companies chew the fat on lean By Martin Cash No hike in rates: bank A marvellous May 1,605 - number of properties sold last month through the Winnipeg Realtors' Multiple Listing Service 10 - percentage increase from May 2011' s 1,463 sales $ 411.4 million - dollar volume of sales for the month 17 - percentage increase from May 2011' s $ 350 million 5,434 - number of properties sold in the first five months of 2012 5 - percentage increase from the same period last year, when 5,144 properties were sold $ 1.33 billion - dollar value of sales in the first five months 12 - percentage gain from a year earlier, when $ 1.18 billion worth of properties changed hands 24 - average number of days on the market for a residential detached home 18 - average number of days it took to sell a home priced in the $ 300,000 to $ 350,000 range, which was the category with the fastest turnover time - source: Winnipeg Realtors Norman Bodek MIKE DEAL / WINNIPEG FREE PRESS Robin Sherman stands in front of a duplex she sold last month for $ 301,000. 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