Multi-fam­ily unit starts ex­pected to jump

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

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.

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