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Winnipeg Free Press - PRINT EDITION

New home construction slows in city as condo development decreases

By: Murray McNeill

Posted: 05/9/2012 1:00 AM | Comments: 0

MANITOBA home builders took a bit of a breather last month while their counterparts in other parts of the country continued to pump out new condominiums like there's no tomorrow.

April housing starts data released Tuesday by Canada Mortgage and Housing Corp. show new home construction slowed in Winnipeg in April as a rebound in single-family starts was overshadowed by a much bigger drop in multi-family starts.

There were 256 combined starts in the Winnipeg Census Metropolitan Area, a decline of 1.9 per cent from 261 in April 2011.

The drop was due to a 12 per cent reduction in multi-family starts, including condos, apartments, semi-detached units and row housing. Builders broke ground on 88 such units, versus 100 a year earlier.

That decline overshadowed a 4.3 per cent increase in single-family starts -- 168 units versus 161 -- which partially made up for March's 12.8 per cent decline.

"Stable employment conditions and improved earnings continue to support demand for single-detached homes," said Dianne Himbeault, CMHC's senior market analyst in Winnipeg.

Himbeault said after four months, single starts were running 10 per cent ahead of last year's pace -- 561 units versus 509. And despite April's slowdown, multi starts were running 84 per cent ahead of last year's pace -- 446 units versus 242.

However, Himbeault noted new-home construction got off to a slow start last year and to a surprisingly strong one this year -- in part due to mild weather.

The 446 multi starts in the first four months included 183 rental apartments, 245 apartment-style condos, and 18 semi-detached condos.

Himbeault said the 183 rental units were the highest January-to-April total in at least two decades and that's good news for local renters grappling with one of the lowest apartment vacancy rates in the country (1.1 per cent).

Nationally, the number of home starts in April blew expectations out of the water and showed the country's condo market remains as hot as ever.

They hit their highest level since 2007 -- 244,900 units versus expectations of 204,000.

Economists appear to be getting worried about how strong housing starts in Canada have become. Saying that building has outpaced demand, Robert Kavcic of BMO Capital Markets sounded the bubble alarm Tuesday.

"There's little question now that Canada's residential construction sector is heated," he said.

Also of concern is the number of condos sitting empty in Canada, especially in Toronto. Canada has the highest stock of unsold condominiums since the early 1990s, said Holt.

He called it a "ghost city" phenomenon, noting CMHC estimates about 25 per cent of condominiums in the Greater Toronto Area are sold but vacant.

-- with files from Postmedia News

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition May 9, 2012 B5

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