Time to shut down housing-start falsehoods
WITH the analysis of last year’s performance and the predictions that come for this year and beyond, there are always a variety of theories and speculations offered to spur discussion and perhaps create some controversy. Although they succeed in getting people talking, they can also create false harm if believed. Following are three hypotheses that have surfaced recently that just aren’t true. The first is that Manitoba and Winnipeg are finally experiencing a housing bubble. Although the housing starts last year declined by more than 10 per cent, one has to look from where they declined. Every year from 2010 through 2013, housing starts increased dramatically. In fact, every year was a 25-year high from a historical perspective. You can’t set a new record every year, just as you can’t hit a home run every time you come to the plate. It isn’t practical, feasible or healthy. If we do, in fact, have 6,300 provincial starts this year as projected, it will represent the third-highest total in more than 25 years. Our record of consistency and growth ensures a healthy market. Next is the premise the baby boomers are causing the new and resale markets to stagnate. The theory is as the boomers advance in age, they are settling into a consistent lifestyle and will either be dumping their homes or downsizing. While it is true boomers may be altering their lifestyles, this will promote housing activity, not slow it down. The younger segment of this generation is finally reaching their income peak. With this, they are able to buy that new home of their dreams. They have progressed from rental to multi-family to resale homes and are now able to build something for the next 30 years of their lives. Older boomers are building and buying for the adult-lifestyle market. Whether this market is for eight months north of the border, stylish condominium living or the mobility ease of a new bungalow, there is a shortage of each in the local market and new construction is necessary. The last falsehood is a balanced resale market is a harbinger of lower resale prices. Again, not true. The same frenzy of the times of sellers’ markets may have changed but there is still a tremendously strong demand for homes in the Winnipeg market. Rental vacancies have gone up as home ownership population percentages have increased. The number and value of resale transactions have increased year after year as the demand for home ownership continues.