Canada's national housing agency has scaled back its housing-starts forecast for Manitoba for 2014 after weaker-than-expected population and job growth this year.
In its latest housing-market forecast released Wednesday, Canada Mortgage and Housing Corporation (CMHC) predicts total starts will decline by 14 per cent to 6,400 units from an unusually strong 7,465 in 2013.
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 2013's total of 13,735.
Dianne Himbeault, CMHC's senior market analyst in Winnipeg, said Manitoba's population and job growth haven't been as strong as anticipated this year, and that has led to a weaker-than-expected demand for both new and resale homes.
She said the corporation expects the impact to be concentrated on the single-detached side of the new-homes market because builders there are able to react more quickly to changes in market conditions than their counterparts on the multi-family side, where the projects tend to be much bigger.
"They (projects) are years in the making and they (the builders) are already doing their pre-sales and they've already invested so much time and money... that the tendency is to keep rolling."
For 2015, CMHC predicts housing starts will rebound to 6,500 units, and MLS sales will climb to 12,400 units.
While CMHC predicts the demand for resale homes will also be weaker than expected this year, it said other factors will partially offset that.
"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 corporation said this year's modest growth in MLS sales is expected to be followed by a 1.4 per cent increase to 14,100 unit sales in 2015.
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.
For the Winnipeg Census Metropolitan area, CMHC said it expects to see modest increases in MLS sales and selling prices in 2014 and 2015, and moderate declines in housing starts.
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."
MLS sales 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, MLS sales are expected to range from 455,800 to 502,900 units, with and average price of $396,500 to $416,900.
-- with files from the Canadian Press
Forecast by the numbers
Highlights from the Canada Mortgage and Housing Corporation's third-quarter housing-market forecast for Manitoba (percentage change in brackets).
|Area||2013 starts||2014 starts||2015 starts|
|Manitoba||7,465||6,400 (-14)||6,500 (1.6)|
|Winnipeg CMA||4,705||4,500 (-4.4)||4,350 (-3.3)|
|Area||2013 MLS* sales||2014 MLS sales||2015 MLS sales|
|Manitoba||13,735||13,900 (1.2)||14,100 (1.4)|
|Winnipeg CMA||12,008||12,250 (1.3)||12,400 (1.2)|
AVERAGE MLS SELLING PRICE
|Manitoba||$260,849||$266,200 (2.1)||$273,800 (2.9)|
|Winnipeg CMA||$268,382||$277,000 (3.2)||$285,000 (2.9)|
*Multiple Listing Service
-- source: Canada Mortgage and Housing Corporation