Home­build­ing in­dus­try pre­pared for growth

Winnipeg Free Press - Section G - - RESALE HOMES - By Mike Moore

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.

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