A recent Pulse survey was conducted by the Canadian Home Builders' Association with assistance from the Canadian Mortgage and Housing Corporation and Natural Resources Canada. The survey was nationwide and involved new-home builders and renovators.
We will be looking at the combined results from Manitoba and Saskatchewan.
Combined new-home starts are projected to be almost identical in 2013 to what occurred in 2012, which was an extremely positive year. Given that numbers for the rest of Canada are expected to dip approximately eight per cent, this bodes even better for the Prairies.
Similarly, renovators in these two provinces are expecting an increase in activity for this year, with one-third expecting an increase and the other two-thirds anticipating business to be about the same.
Full-time employment in the residential construction industry is expected to be up over a year ago. As stated in earlier columns, the entire construction industry is experiencing a shortage in skilled labour.
One interesting occurrence already being experienced is an increase in traffic for first-time home buyers. This may be because of the extremely tight resale market in both provinces that has resulted in fewer listings, competitive bidding and a closer price margin.
Although new-home prices continue to increase in Manitoba and Saskatchewan, they have not typically done so at the same rate as resale homes.
Finally, the survey asked new-home builders about their greatest problems.
Over 50 per cent stated rising serviced lot prices, over 40 per cent stated rising development charges, and over 40 per cent stated shortages in serviced lots. Before the shovel even hits the ground, builders are being hit with expenses beyond their control. These charges, often applied by government-related agencies, are the greatest threat to housing affordability.
The next-highest item mentioned (25 per cent) was the shortage in available financing, resultant from changes in CMHC and Bank of Canada regulations. The feeling is that the knee-jerk reaction to problems in centres such as Toronto and Vancouver resulted in legislation that curtailed activity on the Prairies, where this problem did not exist.
Finally, issues such as code changes, rising building material costs, building code changes and zoning attitudes each garnered over 20 per cent.
Mike Moore is president of the Manitoba Home Builders' Association.