Prairie mar­ket has fallen, but it can get back up

Winnipeg Free Press - Section F - - HOMES - By Mike Moore

THE Canada Mort­gage and Hous­ing Cor­po­ra­tion has re­leased its hous­ing fore­cast for the three Prairie prov­inces. Things look bleak for Al­berta, Saskatchewan is about to re­bound and Man­i­toba just keeps rolling.

There’s no deny­ing the im­pact fall­ing oil prices have had on the Al­berta econ­omy. Cal­gary was hit hard last year and will con­tinue with lower pro­duc­tion num­bers. Ed­mon­ton will suf­fer from lower hous­ing starts this year.

There were more than 40,000 hous­ing starts in Al­berta in 2014. That num­ber could fall to 24,000 this year. Re­tail sales de­clines and job losses are sure to hit an al­ready wounded provin­cial econ­omy even harder.

MLS re­sale num­bers in Al­berta are fall­ing in sim­i­lar fash­ion with av­er­age prices drop­ping be­tween $15,000 and $20,000. The av­er­age price is still more than $100,000 over Man­i­toba’s av­er­age — but this is still news.

Saskatchewan ex­pe­ri­enced a sharp de­cline in 2015, fall­ing from more than 8,000 starts the year be­fore to just over 5,000 starts. In my opinion, the new home-start num­bers they ex­pe­ri­enced in 2013 and 2014 were false blips on the radar screen; the range they are in now and will con­tinue to be in for the next few years are their op­er­at­ing norm. Re­sale num­bers and prices re­main con­stant.

Man­i­toba new home start num­bers also de­clined from an ab­nor­mally high 2013. As re­ported here nu­mer­ous times be­fore, we have set­tled into a com­fort­able pace just slightly ahead of Saskatchewan. This is likely to re­main for a while.

Our re­sale mar­ket keeps grad­u­ally in­creas­ing in num­bers sold and in av­er­age re­sale value. There has not been and there are no signs of prices drop­ping in Man­i­toba. We are still, on av­er­age, more af­ford­able in terms of home price pur­chase than Saskatchewan.

The rental va­cancy rate presents an in­ter­est­ing pic­ture. Al­berta has tra­di­tion­ally been av­er­ag­ing less than a two per cent va­cancy rate for the past few years. It is now ex­pected to come in at just over five per cent. Sim­i­larly, in Saskatchewan, va­can­cies have been av­er­ag­ing just over two per cent but are now pro­jected to ex­ceed six per cent. Mean­while, here in Man­i­toba, we have gone from the mid- to high two per cent va­cancy to three per cent.

Provin­cially, Man­i­toba ap­pears to be in a much more sta­ble po­si­tion than ei­ther Al­berta or Saskatchewan when it comes to hous­ing.

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