Homebuilding industry prepared for growth
LAST week, we stared into the national economic crystal ball and saw that Canada is expected to rebound gradually from the recession of 2009. Similarly, housing starts for 2010 were expected to rise slowly but still positively. Manitoba’s economic forecast was brighter, but the slow-but-sure approach was very evident.
Given how poorly Ontario, Alberta and B.C. performed last year, it would be natural to assume even the slightest rebound from the big three would dramatically impact our national statistics. After all, in terms of housing starts, whatever happens there has far greater national impact than what happens in the rest of the country.
Although those three provinces will be bouncing back, it will be a long, slow positive trend. The Manitoba forecast by the Canada Mortgage and Housing Corporation continues to be cautiously optimistic. Economic growth is expected to support more housing activity in 2010 than 2009.
Due to the nature of multi-family projects, starts in that sector fell sharply in 2009. Between the needs to finish selling 2008 inventory and to realize the requisite number of pre-sales to initiate a project, multi-family starts fell to 2005 levels of just over 1,100 units. A rebound is anticipated this year and, if the first two months of the year are any indication, the multi-family growth spurt has already begun.
Single-family detached units have always been the mainstay of the Manitoba housing market. Their consistency has been nothing short of amazing.
The provincial inventory of multifamily and single-family detached units hit all-time highs in late 2008. A good portion of 2009 was spent reducing this inventory to where it now sits at levels commensurate with the past 10 years.
Single-family detached starts in Manitoba are projected to increase to just above 3,300 units in 2010 from 3,000 units in 2009, adding another 150 to 200 starts in 2011. Multi-family starts were at 1,132 in 2009 and are expected to increase to over 1,300 in 2010, increasing again in 2011.
The Manitoba residential construction industry is buoyed by the CMHC projections and is cautiously optimistic for 2010 and 2011.