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Housing starts to drop to 7,100 units: CMHC

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Manitoba's homebuilders will pull back on the reins in 2014 after four straight years of escalating new-home construction activity, the latest forecast from Canada Mortgage and Housing Corp. shows.

In its Fall 2013 forecast, released Thursday, the national agency said housing starts in the province are expected to dip by 4.1 per cent to 7,100 units in 2014 after climbing by a projected 2.3 per cent this year to 7,400 units from 7,242 in 2012.

In the Winnipeg Census Metropolitan Area (CMA), the decline is expected to be more modest -- 2.9 per cent -- after a 4.6 per cent jump in 2013.

"While construction is expected to remain elevated over the near term, conditions supporting housing demand are easing, including lower levels of international immigration and moderating job and income growth," said Dianne Himbeault, CMHC's senior market analyst for Winnipeg.

"These factors will contribute to a slightly lower number of starts in 2014."

Manitoba Home Builders Association president Mike Moore said despite the expectation of fewer starts in 2014, the overall numbers remain pretty rosy.

"I would say we're kind of in a holding pattern where 2014 looks a lot like 2013 and 2013 looked a lot like 2012, which is good because 2012 was a good year."

CMHC is also forecasting another solid year in 2014 for the local resale-homes market.

It predicts Multiple Listing Service (MLS) sales in Manitoba will grow by 0.7 per cent to 13,800 units after falling by a projected 2.2 per cent to 13,700 in 2013. And sales in the Winnipeg CMA are expected to rebound by 1.7 per cent to 12,000 units after dipping by a projected 2.4 per cent to 11,800 this year.

The average MLS selling price is also expected to its upward trek. CMHC predicts Manitoba's average price will rise by 3.2 per cent to $264,600, following a projected 4.1 per cent increase this year.

And the Winnipeg CMA's average price is expected to rise by three per cent to $275,000 after a projected 4.7 per cent hike this year.

Nationally, CMHC tweaked its 2013 and 2014 forecasts for housing starts. It now expects slightly more housing starts this year and slightly fewer in 2014 than in the previous outlook issued in August.

That will result in a period of relative stability, although both years will be slower than 2012, when there were 214,827 housing units started, the agency said.

Its new forecast is for between 179,300 and 190,600 units this year, with a mid-point of 185,000 units.

That's up from the previous 2013 forecast of 182,800 starts -- an increase of 2,200 that is almost offset by a lower forecast for 2014.

-- Murray McNeill, with files by The Canadian Press

Republished from the Winnipeg Free Press print edition November 1, 2013 B10

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