Housing starts in Manitoba and across the Prairies are expected to cut back on the throttle a bit in 2014 and 2015, but still be generally strong.
The Canada Mortgage and Housing Corporation released their updated forecast last week and the numbers were anticipated and reassuring.
The regional projections cite a decline in net migration from record levels in 2013, and a growing inventory of existing housing stock, as primary reasons for the reduction in starts.
Not surprisingly, Alberta will still experience growth, primarily due to the rebuilding of Calgary. Edmonton will cool off by 12 per cent over the next two years from a record 2013. Starts in Saskatchewan will decline by 10 per cent but, then again, there is no way that Regina or Saskatoon could be expected to maintain their torrid pace of growth over the past two years.
New-home starts in Manitoba are also expected to decline by double-digit proportions in 2014 before bouncing back slightly the following year. This will primarily be outside the Winnipeg CMA where reductions will be half what is occurring elsewhere in the province.
So, the Prairie numbers seem to reflect a trend that is happening across the country: an easing from record highs in 2012 and 2013 to more historically consistent numbers.
Part of the reason for the recent cooling-down period has been attributed to the government's tightening of mortgage lending rules. Mortgage insurance is required when the buyer is purchasing with less than 20-per-cent equity. The same rules apply for second homes. Private mortgage insurers are expected to pick up most customers not working with CMHC.
Within Winnipeg, it appears to be business as usual. There will still be a need for more than 2,000 single-family detached starts and even more in the multi-family sector. This group appears to be a bit of an anomaly. Although there will be an increase in existing inventory, there will also be an increase in demand. This is attributable to a demographic profile of growth among younger households and older households looking to downsize.
The resale market will continue to grow to more than 12,000 transactions in each of the next two years, thereby providing ample choice. Average prices are expected to reach $285,000 in 2015, further exemplifying the value of your home.
Mike Moore is the president of the Manitoba Home Builders' Association.