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This article was published 26/10/2017 (1705 days ago), so information in it may no longer be current.
Manitoba's resale-homes market should keep chugging along for at least two more years, but the current boom in new-home construction activity is coming to an end, as the number of housing starts returns to more sustainable levels, Canada Mortgage and Housing Corporation (CMHC) predicts.
In its Fall 2017 Housing Market Outlook report released Thursday, the federal housing agency says the local resale market should remain fairly stable over the next two years, with balanced-market conditions continuing.
That will pave the way for Multiple Listing Service (MLS) sales to continue growing at a moderate pace. CMHC predicts Manitoba will record between 14,600-15,000 sales in 2018, and between 14,700-15,300 in 2019. That's up from a projected 14,400-14,800 sales this year.
It also predicts the MLS average selling price will continue to rise, climbing to between $288,800-$293,500 in 2018 and to between $294,000-$299,500 in 2019. That compares with a projected average price this year of between $283,500-$287,600.
While CMHC predicts business as usual on the resale side of the market, it says it will be a different story on the new-homes side. It predicts the number of housing starts will drop to between 5,900-6,500 units in 2018, then rebound to between 6,100-6,900 units in 2019.
That's down from this year's projected total of 7,000-7,600 new starts, and more in line with the 5,319-6,220 starts per year that were recorded in the 2014-16 period.
CMHC attributes the unusually high number of starts this year, in part, to the City of Winnipeg's new impact fee on new suburban development, which came into effect May 1. When the city announced in October 2017 that it would be introducing the new fee, it sparked a flurry of housing starts as home buyers and builders scrambled to get projects underway before the fee kicked in.
The fee, which for now only applies to homes being built on the city's suburban fringes, adds about $5 per square foot to the cost of a new home, or $5,084 for every 1,000 square feet.
Manitoba Home Builders Association president Lanny McInnes could not be reached Thursday for comment on the new CMHC forecast.
The CMHC report also includes projections for the Winnipeg Census Metropolitan Area (CMA), which includes Winnipeg and 10 neighbouring municipalities.
It's also forecasting a moderate increase in MLS sales, and a slowdown in home-building activity.
It's predicts the CMA will record between 13,110-13,490 MLS sales next year, and between 13,310-13,690 sales in 2019. That compares to a projected 12,810-13,190 sales this year.
On the new-homes side, it's forecasting housing starts will drop to between 3,760-4,240 units next year from a projected 5,070-5,730 units in 2017, then rebound to between 3,900-4,460 units in 2019. That, too, is more in line with the CMA's 2016 total of 4,054 new starts.
On Thursday, CMHC also released its latest quarterly housing market assessment report. The report looks at whether there is evidence of problematic conditions, or vulnerability, in Canada's major urban housing markets.
The four signs of vulnerability it looks for are over heating, over valuation, price acceleration and over building. The only area of concern was with over building, where it once again detected a moderate degree of vulnerability due to a build-up of completed and unsold multi-family units. But it noted the number of completed or unsold units has been declining for the last two quarters.