Winnipeg Free Press - PRINT EDITION

Banner year for homebuilders

City had 22% increase in starts in 2012; number of condo units more than doubled

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Last year was the kind of year most Winnipeg homebuilders dream about.

Not only was it the best year since 1987 for apartment and condominium construction in the Winnipeg Census Metropolitan Area (CMA), it was also the best since 1989 for construction of single-family homes, according to year-end housing-start numbers released Wednesday by Canada Mortgage and Housing Corporation (CMHC).

"We cracked the 4,000 barrier (for total starts). That's monumental," said Manitoba Home Builders' Association president Mike Moore. "And the fact it was not on the back of one sector is also significant. Single-detached and multi starts were both up."

Moore said it wasn't just the big builders who had a banner year.

"Everybody was busy, I don't know of any of our members who wasn't busy."

A variety of factors combined to make 2012 a year to remember for the local homebuilding industry. The Manitoba economy remained healthy, employment levels were high, interest rates were low, the population was growing and there was an ongoing shortage of homes for sale in the resale market.

The city's apartment-vacancy rate also remained chronically low at 1.7 per cent as of last October, which gave developers the confidence to build more rental units. And condominiums continued to be a popular alternative for price-conscious first-time homebuyers and aging baby boomers looking for a change in lifestyle, said Moore and Dianne Himbeault, CMHC's senior market analyst for Winnipeg.

Himbeault noted there were more than twice as many condos started last year than in 2011 -- 1,092 versus 517 -- and 844 rental units.

That latter figure, which were all apartment-style units, was a four per cent increase from the 812 started in 2011. It was the third straight year rental starts surpassed the 800-unit threshold.

"We're starting to see some sustained development," said Himbeault.

While it was a banner year for both single- and multi-family starts, it was the multi side that saw the biggest improvement in 2012. Starts there soared by 46 per cent to 1,936 units, while single starts grew by a more modest six per cent to 2,129.

Moore said the weather also worked in the industry's favour in 2012.

"We didn't have the flooding we had (in 2011) or the spring rains for two months like we had a few years ago," he said. "And to their credit, I think (homebuilding) people were putting in long hours to take full advantage of the good weather while it lasted."

Although Winnipeg's 22 per cent increase in starts was one of the biggest yearly gains among the 34 metropolitan areas covered in the CMHC report, there were six others that did even better. Most notable among them were Regina (up 83 per cent), and Calgary and Edmonton (both up 38 per cent).

Winnipeg's strong showing came in spite of a slowdown in construction activity in the final month of the year, when the number of starts fell by 20 per cent to 116 units.

The slowdown was focused entirely on the multi-family side of the market, where starts were down 71 per cent to 18 units. Single starts edged up one per cent to 151 units.

Nationally, CMHC said housing starts declined for the fourth consecutive month in December. Although that's well above sustainable levels, the decline led to further fears the economically important sector could be headed for a hard landing.

CMHC said the pace of starts slowed by a modest 1.7 per cent last month to 197,976 on an annual basis. On a real basis, there were 16,352 actual starts in December, with condo construction falling 4.7 per cent and single-unit dwellings rising by 8.6 per cent.

The decline was less than analysts expected, even before the agency revised November's starts upwards to 201,376. That made the average starts for 2012 tip the scale at a hefty 215,171, up 11.4 per cent from 2011 and the highest level since 2007.

On Tuesday, Canada's leading bankers judged the country's real estate market as "relatively solid" despite the slowdown and concerns about overbuilding in the condominium segment, forecasting that 2013 would see a "soft landing" in the market.

 

-- with files by The Canadian Press

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition January 10, 2013 B5

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Updated on Thursday, January 10, 2013 at 7:08 AM CST: replaces photo, adds fact box

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