December 11, 2013 Sections
Winnipeg Free Press - PRINT EDITION
IT was a case of black and white for Winnipeg's housing market in March.
One day after the resale-homes sector reported its bleakest March sales numbers in nearly two decades, the new-homes side came out with a glowing report showing a nearly doubling in the number of housing starts for the month.
Canada Mortgage and Housing Corp. said local builders began work on 515 new single- and multi-family units. That was a whopping 94 per cent increase over the 266 started in March of last year.
The news was a refreshing change from Monday's sobering report from the Winnipeg Realtors Association, which showed existing homes through the local Multiple Listing Service plummeted by 26 per cent to 844 units last month. That was the lowest March total since 1995 and well off the 10-year average for March of 1,043 units.
"It was a bit of a tale of two markets," Dianne Himbeault, CMHC's senior market analyst for Winnipeg, said in an interview Tuesday.
Himbeault said the biggest surge in home-building activity was on the volatile multi-family side of the sector, where the starts more than doubled to 323 units from 136 a year earlier.
But it was also a good month for builders of single-family homes. Those starts jumped by 48 per cent to 192 units, offsetting two previous months of double-digit declines.
"Strength in both the single-detached and multi-family sectors in March helped reverse the downward trend in total housing starts in Winnipeg, which had peaked last October," Himbeault said. "Demand continues to be supported by positive net migration and job creation."
Manitoba Home Builders Association president Mike Moore said one of the reasons for the surge in starts is most builders were finishing show homes in February for the popular Spring Parade of Homes. But that work was completed by the end of the month, which freed up construction crews to start working on new projects in March.
Also, while March was cold, "it wasn't bitterly cold like it was in February," Moore said. "In February, you couldn't even go outside (because of the high wind chills)."
He said a busy March usually bodes well for the spring and summer building season. He noted CMHC has forecasted a similar number of housing starts for this year as for last year. If they're right, builders will be happy.
The CMHC report was one of two upbeat reports released on Tuesday. Statistics Canada also reported Manitoba's construction industry rebounded from a slow start to the year with a 25 per cent jump in building-permit activity in February.
The agency said local municipalities issued $203.1 million worth of permits during the month, which was not only a big improvement from January's total of $162.4 million, but was also 40 per cent better than a year earlier.
The biggest gains were on the non-residential side of the market, where permit values jumped by 54 per cent to $75.6 million. The residential-permit total was up a more modest 12.5 per cent to $127.4 million.
Nationally, the March housing-starts totals and the February building-permit numbers were seen as further signs of a cooling Canadian housing market. But analysts said fears of a major crash have yet to materialize. CMHC said the pace of housing starts in Canada crept up only slightly in March, to 12,273 or 184,028 on an annualized basis. And Statistics Canada said future building intentions for residential construction fell 7.2 per cent in February to $3.6 billion.
Both numbers were seen as bad news for the Canadian economy. They suggest the key housing market will be a net drag on growth during the quarter and likely in the near term, as starts and sales come off the higher levels of previous years.
But analysts said the recent slow descent in a sector that some say is overbuilt and also overpriced by as much as 25 per cent -- especially in Vancouver and Toronto -- is just what the doctor ordered. And it may prevent a punitive collapse.
"The slowdown suggests we are not crashing, people are not panicking, especially condo builders," said Benjamin Tal, a senior economist with CIBC World Markets.
-- with files by The Canadian Press
HERE'S how the housing-start and building-permit numbers break down:
Republished from the Winnipeg Free Press print edition April 10, 2013 B5
Updated on Wednesday, April 10, 2013 at 9:11 AM CDT:
adds fact box