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Home-resale rate dip won't drop prices

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A slow start to the year has prompted Canada's national housing agency to downgrade its forecast for Winnipeg's resale-homes market for 2013, although it's still predicting another banner year for local homebuilders.

In its spring 2013 forecast released on Tuesday, Canada Mortgage and Housing Corporation (CMHC) predicts Multiple Listing Service (MLS) sales will decline by 2.4 per cent to 11,800 units this year from 12,094 in 2012.

But despite the anticipated drop in sales, CMHC still predicts the average selling price of a home will to climb over the next two years.

"A reduction in existing-home sales has resulted in an increase in active listings and a continued move toward a balanced market," it said. "Under these conditions, expect price growth to moderate to 4.3 per cent in 2013 to an average of $266,000, followed by a 3.1 per cent increase to $274,300 in 2014."

The corporation said weaker sales activity in the first quarter of this year will take a bite out of the year's sales total.

"We created a bit of a deficit in the spring with the sales we had," said Dianne Himbeault, CMHC's senior market analyst for Winnipeg.

And while last month's increase in sales volume is expected to continue in the second half of the year, she said it's unlikely the rebound will be strong enough to boost the yearly total to last year's level.

Looking further ahead to 2014, CMHC said MLS sales are expected to continue to improve, posting a modest increase of 1.7 per cent to 12,000 units.

On the new-homes front, CMHC is standing by its earlier prediction housing starts in the Winnipeg Census Metropolitan Area will increase by 4.6 per cent to 4,250 units this year from 4,065 in 2012.

It said the increased building activity will be evident on both sides of the market, with single-family starts forecast to grow by 3.3 per cent to 2,200 units, and multiple-family starts expected to climb by 5.9 per cent to 2,050 units.

"Population and employment increases, combined with low mortgage rates, will prompt homebuilders to increase production levels this year," Himbeault, said. "Increasing inventories will inhibit growth moving forward, keeping total starts at the same level in 2014."

Nationally, CMHC said Canadian builders appear poised to pick up the pace of residential construction in the later half of 2013, but the total number of starts will remain below last year's level.

The corporation estimates between 173,300 and 192,500 units of housing -- including single- and multiple-family dwellings -- will be started this year, with a mid-point forecast of 182,900 units. That's down nearly 15 per cent below the 2012 level of 214,827 units.

The agency also says sales of existing homes are expected to range between 412,000 and 474,800 units in 2013, with a mid-point forecast of 443,400 units, down from the 2012 level of 453,372 sales.

The average MLS price is forecast to be between $359,400 and $380,000 in 2013.

 

-- with files by The Canadian Press

Republished from the Winnipeg Free Press print edition June 26, 2013 B5

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