Time to shut down hous­ing-start false­hoods

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

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.

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