Canada’s national housing agency has scaled back its housing-starts forecast for Manitoba this year after a weaker-than-expected first half for the local homebuilding industry.
In its latest housing market forecast released today, Canada Mortgage and Housing Corporation (CMHC) predicts total starts in Manitoba will decline by 14 per cent to 6,400 units from an unusually strong 7,465 in 2013.
However, it predicts homebuilding activity will rebound slightly in 2015, with starts increasing by 1.6 per cent to 6,500 units.
The corporation has also scaled back its 2014 expectations for the province’s resale-homes market, although not by much. It’s now forecasting 13,900 MLS sales for this year, instead of the 14,000 it was calling for at the start of the year. However, 13,900 would still be a 1.2 per cent improvement from the 13,735 sales recorded in 2013.
"Equity gains from the past few years will prompt some owners to upgrade their homes," it said, "while elevated active listings will offer more selection to prospective buyers."
The trend towards higher MLS sales activity is also expected to continue in 2015, CMHC said. Sales are expected to hit the 14,100-unit mark, for a 1.4 per cent gain.
In terms of price increases, CMHC predicts the average MLS sales price will climb by 2.1 per cent this year to $266,200 from $260,849 in 2013. And next year it’s expected to rise by a further 2.9 per cent to $273,800.
Nationally, CMHC said Canada’s housing market may start showing some signs of slowing down over the next two years as new construction begins to ease.
It is forecasting housing starts in Canada will range between 179,600 and 189,900 units in 2014 on an annual basis, and drop to a range of between 163,000 and 203,200 units in 2015.
"Recent trends have shown an increase in housing starts, which is broadly supported by demographic fundamentals," said Bob Dugan, chief economist at CMHC.
"However, our latest forecast calls for starts to edge lower as builders are expected to reduce inventories instead of focusing on new construction."
The third quarter outlook also says MLS sales in Canada are expected to range between 450,800 and 482,700 units in 2014, with an average price of between $394,700 and $405,700.
In 2015, the CMHC says MLS sales are expected to range from 455,800 to 502,900 units, with and average price of $396,500 to $416,900.
— Staff/with files by Canadian Press