OTTAWA — The COVID-19 pandemic has steered Winnipeg’s housing market away from a glut of new builds, according to federal data released Monday morning.
"There has been an impact on both the resale and the new-home sides; we’ve seen a slowdown in new construction," Heather Bowyer, a senior market analyst with the Canada Mortgage and Housing Corp., told the Free Press.
In its recurring Housing Market Assessment comparing this February to September, the CMHC said it still has moderate evidence of overbuilding in the city, but the pandemic has brought the pace of construction to below the agency’s level of concern.
"Before we lower the degree of vulnerability we want to see this trend persist, and not (be) sort of a blip or a one-off," Bowyer said.
The agency monitors household incomes along with the cost and availability of various types of housing across Canada’s largest cities. For the Winnipeg area, which includes East and West St. Paul and municipalities with a large share of commuters, the agency isn’t concerned about the cost of homes and rentals, nor about inflated prices.
Ever since 2016, the CMHC has been closely watching whether too much is being built in the city, which could disrupt the balance of supply and demand needed to keep a stable housing market.
"We see a switch from condominiums to rental units, especially apartment-style, so this is contributing to a slowdown in completions, and a trending lower of the overbuilding metric in Winnipeg," Bowyer said. That could change if people start moving to different cities at the same pace they did before the pandemic, Monday’s report notes.
Nationally, the agency found "evidence of rising imbalances," with housing availability shifting along the lines of income inequality in cities like Toronto.
Bob Dugan, CMHC’s chief economist, said his team’s projection could change as people shift from government benefits, especially if there are more layoffs and pay cuts.
"The unprecedented amount of government financial support to households through initiatives like the CERB significantly boosted disposable income in the second-hand quarter," he told reporters.