New-home construction goes through roof
IT was no surprise the first quarter of new-home construction in Winnipeg and throughout Manitoba would be stronger in 2010 than in 2009.
After all, we were just starting to come out of the recession and consumer confidence was still on shaky ground.
However, since the Spring Parade of Homes, new-home construction has been vibrant. Demand for new homes has been consistently solid every month of this year. The first seven months have seen an increase in starts over 2009 each and every month.
The results are most impressive. To date, in Winnipeg and surrounding areas, there have been 1,096 single family detached home starts. This represents an increase of 283 homes or 34.8 per cent over last year.
Multi-family dwellings present a much more dramatic change. Last year, by the end of July, there had been 163 units started. The economic confidence in initiating projects of this magnitude was very low. However, this year there have been 987 multi-family units started in Winnipeg, a staggering increase of over 600 per cent.
In total, the 976 starts over the first seven months of 2009 have turned into 2,083 starts in 2010. Only cities like Edmonton, Oshawa and Victoria, who were absolutely devastated into complete inactivity by the recession, have shown greater growth this year.
Year-end projections that commenced at 4,600 units for the province are being recalibrated to more likely scenarios approaching 5,000. This would return Manitoba to the levels experienced a couple of years ago.
What is the cause of this increased demand for new housing? There is no single reason; much like our economy, it’s diversified. Winnipeg and Manitoba are still experiencing significant growth through immigration and net migration from other provinces.
As well, Manitobans, in general, tend to build up more equity in their homes than other provinces, thereby making it easier to create a solid down payment on a new home. Also, mortgage rates have recently dropped somewhat.
The residential construction industry has had a strong first seven months in 2010 and is expected to be consistent all year. This will bode well for employment and the economy in general. Manitobans are acutely aware that now is a great time to buy a new home and are taking advantage of the opportunity.