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Multiple units aren't lagging

Hey there, time traveller!
This article was published 11/8/2014 (1107 days ago), so information in it may no longer be current.

AT first blush, it looked like the multi-family-homes side of the local housing market missed out on the party last month.

As reported last Friday, July was a record-breaking month for Winnipeg's resale-homes market. And new housing-start numbers released Monday by Canada Mortgage and Housing Corporation showed single-family housing starts were up 15 per cent from a year earlier, but multi-family starts were down 23 per cent.

The Heritage Landing highrise apartment block under construction at 300 Assiniboine Ave., on Monday.


The Heritage Landing highrise apartment block under construction at 300 Assiniboine Ave., on Monday.

However, CMHC senior market analyst Dianne Himbeault noted there were still 402 new multi-family units started last month in the Winnipeg Census Metropolitan Area (CMA), which was the most of any month so far in 2014.

"It (402) is still a pretty good number," Himbeault said, adding the only reason for the less-than-flattering year-over-year number is July 2013 was an exceptionally strong month for multi-family starts, with 525.

Manitoba Home Builders Association president Mike Moore also insisted there was nothing wrong with last month's multi-family-starts total.

Moore said he and CMHC both predicted there would be a decline in single- and multi-family starts this year after one of the best years in recent memory in 2013, with 4,705 combined starts.

He said even if CMHC's spring forecast of 4,300 starts this year proves to be accurate, "that's still a darned good year."

Last year was also the fourth consecutive year in which local builders registered more housing starts than in the previous year, and Moore said that trend couldn't continue indefinitely.

"We don't have the capacity, let along the population or buying patterns, to increase every single year."

The CMHC numbers show there was a 14 per cent decline last month in combined starts in the Winnipeg CMA -- 611 versus 707 in July 2013. That left starts for the first seven months running 14 per cent behind last year's pace -- 2,462 units compared with 2,878.

Both sides contributed to the year-to-date decline, with single starts down 18 per cent to 1,081 units and multi-family starts down 12 per cent to 1,381 units.

Moore said even if total starts are down 12 per cent by year's end, which is what he predicted at the start of the year, "that just puts us back to more stable, more sustainable numbers."

Nationally, the number of actual starts dipped by two per cent in July to 16,758 units from 16,445 a year earlier. Year-to-date they were still running four per cent ahead of last year's pace after seven months -- 97,573 units versus 93,947.

However, CMHC said the seasonally adjusted annual pace of urban starts in Canada increased in July to 200,098 units from 198,665 in June. It said the gains were concentrated in Ontario and Atlantic Canada. The Prairie provinces and Quebec all recorded declines, and there were also modest decreases in British Columbia.

It was the fifth consecutive monthly increase in the seasonally adjusted rate, which prompted one economist to warn the surge in new-home construction in Canada is unsustainable and could approach "worrying" levels if interest rates remain at the current level.

Analysis from TD Economics says builders are taking cues from the current housing market, which is riding high on lower interest rates and solid growth in resale prices.

"This level of activity is unsustainable over the near term, on account of an already-moderate level of overbuilding as well as the likely gradual increase in interest rates," said TD economist Jonathan Bendiner.

Bendiner forecasts the pace of Canadian housing starts will work its way downward to the 175,000-180,000-unit range through 2015.


-- with files by The Canadian Press

Read more by Murray McNeill.


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Updated on Tuesday, August 12, 2014 at 7:04 AM CDT: Replaces photo

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