Single-family housing starts are expected to decline 7.6 per cent in the Winnipeg area in 2014, down from 25-year high totals of 2013.
In its Spring 2014 Winnipeg Housing Market Outlook released Thursday, Canada Mortgage and Housing Corporation (CMHC) is forecasting total activity including multi-family starts will ease to 4,300 units in 2014 in the Winnipeg Census Metropolitan Area (CMA) and then moderately increase to 4,350 in 2015.
Dianne Himbeault, CMHC's senior market analyst for Winnipeg, said several factors will result in reduced demand for new housing in 2014, including lower net migration, moderate job growth and increasing competition from the resale market.
"In the face of moderating demand, the inventory of complete and unabsorbed homes is elevated, which will also inhibit production this year and keep increases modest in 2015," she said.
Single-detached starts are expected to slow to 2,050 units in 2014, 7.6 per cent fewer than in 2013. CMHC says that means inventories will be drawn down, prompting a modest 2.4 per cent increase in single-detached housing starts to 2,100 units in 2015.
Multi-family starts will decline even more substantially to 2,250 units in 2014, 9.5 per cent less than 2013. It's expected to remain at this level for 2015, due largely to increasing inventories.
Resale activity in Winnipeg is expected to increase by 1.3 per cent in 2014 to 12,250 transactions and rise a further 1.2 per cent to 12,400 in 2015.
A CMHC release said the market will be supported by stable employment and positive net migration, as well as increased active listings, which will provide more selection and draw some buyers from the new-home market. Additionally, equity gains from previous years and low mortgage rates will continue to support demand.
The average resale price in the Winnipeg CMA is expected to increase by 3.2 per cent to $277,000 in 2014 and a further 2.9 per cent to $285,000 in 2015.