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What slowdown?

Winnipeg still seeing strong demand for new homes

By: Murray McNeill

Posted: 08/10/2012 1:00 AM | Comments: 0

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A partially constructed home is seen on Bridgeland Drive South earlier this month.

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WAYNE GLOWACKI / WINNIPEG FREE PRESS archives Mike Moore: confidence to build and buy

Prices keep climbing and talk of a national housing-market slowdown continues to swirl, but it hasn't stopped Winnipeggers from snapping up new houses like they're going out of style.

"The demand is still very strong for new homes," Manitoba Home Builders Association president Mike Moore said Thursday, after Canada Mortgage and Housing Corp. issued figures showing a 19 per cent jump in single-detached housing starts in the Winnipeg Census Metropolitan Area in July -- 234 versus 196 in July of last year.

"The new-home sales agents keep asking for more (building) lots because they have people who want to buy."

And that's in spite of six consecutive months of rising new-home prices in Winnipeg.

New-housing-price index figures Thursday from Statistics Canada show the cost of a new home increased at one of the fastest paces in the country -- up 0.7 per cent from May and 4.4 per cent from a year earlier.

It said builders blame the latest increase mainly on the rising cost of land.

Moore said the cost of developing land continues to climb, and developers and homebuilders have little choice but to pass those added costs on to buyers.

But the combination of a strong economy, high employment levels and low interest rates has given Winnipeg homebuyers the confidence to keep on buying new homes, he said, and homebuilders the confidence to keep on building them.

He noted this year's Fall Parade of Homes, where local builders showcase their new models, will feature a record 127 new homes. It begins on Sept. 15. "The most we've ever had is 104," Moore said, adding builders wouldn't be erecting that many show homes if they weren't confident they could sell them.

The 234 new single-family units started last month left single starts running nine per cent ahead of last year's pace after the first seven months -- 1,179 versus 1,080.

The gain there helped to offset a 65 per cent drop in the number of multi-family starts -- 77 versus 223 in July 2011.

But CMHC noted multi-starts were still running 48 per cent ahead of last year's pace after the first seven months -- 1,054 versus 714.

"Despite the moderation (in July), multi-family construction remains strong in the Winnipeg CMA as population growth is feeding demand for condominium and rental units," the corporation said.

It said the 1,054 multi-units started during the first seven months of this year included 872 apartment-style units, which includes rentals and condos, 106 row-housing units and 76 semi-detached units.

Moore and Dianne Himbeault, CMHC's senior market analyst for Manitoba, said it's not unusual to see big fluctuations in multi-starts from one month to the next.

"All it takes is an apartment building or a big condo building and it throws that month's numbers out of whack," Moore said.

What's important, he said, is that year-to-date starts are still running well ahead of last year's pace. And 2011 was the best in more than two decades for both single- and multi-starts in the Winnipeg CMA.

Himbeault said the pace of new-home construction this year is exceeding CMHC's expectations. Earlier this year, it forecast a 17 per cent increase in combined starts for this year, and they're running 24 per cent ahead of last year's pace -- 2,233 units versus 1,794 -- after the first seven months.

"So it looks like we're going to have another banner year," she said.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition August 10, 2012 B6

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