The Canadian Mortgage and Housing Corporation recently identified 10 key factors that impact housing-market activity. Although the analysis was from a national perspective, let's drill down to the Manitoba scene.
-- Mortgage rates
Continued historically low mortgage rates will help support housing demand nationally and locally. The good news is that mortgage rates are not expected to increase significantly this year or next.
Employment is forecast to grow 1.9 per cent nationally, and Manitoba is traditionally a leader in low unemployment rates. People who are confident in their employment status look for stability in purchasing homes.
Growth in income at both levels is expected to be modest, commensurate with economic growth.
-- Net migration
Although Canada is expected to continue attracting more immigrants, which positively impacts housing demand, the Manitoba government has stressed the need to continue the extremely successful Provincial Nominee Program.
-- Natural population
Although lower birth rates will lessen demand for additional housing stock, our aging population will impact the type and tenure of housing demanded.
-- Resale market
Manitoba has consistently outperformed the rest of Canada in resale activity. Although average MLS prices may not increase at previous levels, there is still tremendous demand for resale housing here. A positive resale trend usually means the same in the new home market.
-- Vacancy rates
Vacancy rates across Canada are expected to decline to two per cent. They're already lower than that locally. Low vacancy rates support new multi-family construction.
-- Stock of new and unoccupied units
As Manitobans, we tend to be cautious. We build what we can sell, or already have sold. There is far less speculative building and so fewer unoccupied inventory homes here than elsewhere.
-- Changes to mortgage insurance rules
The recent changes to government-backed mortgage insurance through the CMHC had an immediate impact on new home sales, as qualification standards meant a re-evaluation of personal finances. Any additional changes would further impact home-buying, both nationally and locally.
Mike Moore is president of the Manitoba Home Builders' Association.