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Winnipeg Free Press - PRINT EDITION

Winnipeg-area housing starts dive, but industry unfazed

By: Murray McNeill

Posted: 08/10/2011 1:00 AM | Comments: 0

THERE was a sharp drop in housing starts last month in the Winnipeg area, but a local industry official says it's no big deal -- construction activity is still healthy by historical standards.

Canada Mortgage and Housing Corp. (CMHC) figures released Tuesday show there were 419 new single- and multi-family starts last month in the Winnipeg Census Metropolitan Area, which includes Winnipeg and 10 neighbouring municipalities.

That was a decline of 36.9 per cent from the 664 starts recorded in July last year.

However, the bulk of the slowdown was in the volatile multi-family segment of the new-homes market, where starts plummeted 51.2 per cent to 223 units from 457 a year earlier.

Single-family starts were off by a more modest 5.3 per cent -- 196 units versus 207.

"This (196 single-family starts) remains an impressive performance, as builders are already busy with a higher number of units under construction this summer and were challenged by several days of extreme heat," said Dianne Himbeault, CMHC senior market analyst for Manitoba.

Himbeault also noted there were 1,080 single-family homes started during the first seven months this year in the Winnipeg area. Although that was 1.5 per cent fewer than in the same 2010 period, it was the second-best January-to-July total since 1991, she said.

The January-to-July total for single- and multi-family starts combined -- 1,794 units -- was the third-highest in the last 23 years, she added.

The CMHC report came out just one day after Winnipeg Realtors released its July resale-homes market report. It showed last month was the third-best July on record for unit sales and the best ever for dollar volume of sales through the association's Multiple Listing Service.

Himbeault said last month's drop in multi-family starts isn't as bad as it looks because July 2010 was an exceptionally good month for condominium and apartment starts in Winnipeg.

She said CMHC officials also had predicted a decline in multi-family starts this year because 2010 was such a good year and would be tough to match.

Nationally, a stronger-than-expected housing market has helped propel growth in the Canadian economy this year, but economists said Tuesday recent economic and market tumult could jeopardize momentum in the sector.

CMHC said Canadian housing starts rose to 205,100 units on a seasonally adjusted basis in July, 11.6 per cent higher than the 188,900 reported in the same month last year and 4.3 per cent more than the 196,600 recorded this June.

However, the pickup, driven by strong construction on condos and apartment buildings in urban centres, is likely due to builders catching up to robust demand last year rather than expectations of coming growth.

Home-building activity has been increasing through the first seven months of 2011, but starts are still down 4.6 per cent from a year ago.

murray.mcneill@freepress.mb.ca

-- with files from The Canadian Press

Republished from the Winnipeg Free Press print edition August 10, 2011 B6

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