Multi-family unit starts expected to jump
OVER the past two weeks, we have looked at CMHC projections for 2010 from a national and provincial perspective. Manitoba definitely appeared to be rebounding from 2009’s recession at a faster rate than the rest of the country.
Of course, Manitoba was not hit as hard as provinces such as Alberta, British Columbia and Ontario so, given that the drop wasn’t as far, the bounce back up needn’t be as dramatic.
Housing starts in Manitoba are expected to increase by about 400 units in 2010 from 2009. Similar to slightly smaller gains are projected for 2011. Manitoba is once again experiencing slow but sure gains in the market, returning to the productive times of five years ago.
CMHC market analyst Fang Qin says that although residential building permits were down here in 2009, non-residential permits remained constant, thereby highlighting Winnipeg’s skilled-labour shortage. The city’s population increased slightly due to the provincial nominee program.
However, although the program increased our population, it didn’t seem to alleviate the skilled-labour need.
Jeff Powell, CMHC senior market analyst, says single detached starts here are projected to return to the healthy levels experienced between 2003 and 2008. Prices will continue to rise moderately, primarily due to government-imposed charges associated with land prices. Coupled with this slight increase in price comes a larger movement by Winnipeggers towards higher price points when looking for new homes.
The biggest jump anticipated in 2010 is in multi-family starts. Partly due to the elimination of 2008 inventory and partly due to a hesitancy to start new large projects in 2009, this year could see the number of multi-family unit starts double from last year. Powell says we can expect significant resale price increases for at least two years until supply can meet demand.
In summary, Winnipeg housing starts are expected to increase gradually in 2010 with a larger jump in price point propensity than the rest of the province. Single-family detached growth will be steady while multi-family starts should jump dramatically.