Too many condos here, CMHC report maintains

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This article was published 27/04/2016 (3486 days ago), so information in it may no longer be current.

WINNIPEG still has too many unsold condominiums, according to a new report from the Canada Mortgage and Housing Corporation.

In its latest quarterly Housing Market Assessment Report released Wednesday, the federal housing agency said although evidence of overheating, overvaluation and price acceleration in the Winnipeg market remains “weak,” there is still “moderate” evidence of overbuilding on the condo side. Especially apartment-style condos.

As a result, the corporation ranks Winnipeg as one of six Canadian cities where there is moderate evidence of problematic housing-market conditions, it said. The others are Vancouver, Montreal, Edmonton, Ottawa and Quebec.

It said it found “strong” evidence of problematic conditions in four cities — Toronto, Calgary, Saskatoon and Regina — and “weak” evidence of it in five others.

The CMHC considers four factors in assessing the evidence of problematic housing-market conditions in the 15 Canadian cities that are examined. They are overheating, overvaluation, overbuilding and price acceleration. It ranks the evidence of these conditions as either weak, moderate or strong, then gives each city an overall rating.

A spokesman for the Manitoba Home Builders Association could not be reached Wednesday for comment.

Winnipeg’s overall “moderate” rating is unchanged from the previous quarterly assessment, which was released in January. But it’s an improvement from the third quarter of last year, when the CMHC rated the evidence of problematic conditions as “strong” because of concerns about both overbuilding and overvaluation. Concerns about overvaluation have since waned because of a growth in full-time employment and rising disposable incomes.

In its latest assessment, the CMHC said the number of unsold apartment-style condos in Winnipeg has more than doubled over the last two years, jumping to an average of 260 units per month last year from 105 in 2013. There was also a 50 per cent increase in the number of unsold row and semi-detached condos between the final quarter of 2014 and the final quarter of last year, although those types of units account for only 19 per cent of total inventories, it added.

In addition to having more completed and unsold condos, Winnipeg also had more multi-family units under construction last year than in 2014 — an average of 3,025 per month compared with 2,505, the corporation said. That could lead to even more unsold units going forward.

On the single-family-home side, the CMHC said the number of completed but unsold, newly built single-detached homes was only modestly above the per capital threshold for overbuilding last year, at an average of 263 units. And unlike with condos, there were fewer new single-family homes under construction than in 2014, it added.

In the resale market, the CMHC said balanced conditions prevail, with little evidence of overheating, overvaluation or problematic price acceleration.

murray.mcneill@freepress.mb.ca