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New-home market still very healthy

I just received a very well-written housing projection report covering 10 key Canadian urban centres for 2013.

Of the 10 cities, only Calgary was expected to see an increase in housing starts from 2013 over 2012. The rest were projected to decline.

Bad news? Housing bubble? Fiscal cliff? Absolutely not!

Calgary is increasing steadily because its 2012 numbers were only marginally better than its 10-year average from 2001 to 2010. Vancouver has been having problems recently and will fall below its 10-year average. Montreal will also see an end to its growth period for the past number of years and slow down considerably.

As for the rest of Canada, this fall does not have many negative aspects to it. Edmonton will fall to its average during the boom years. Saskatoon will fall to twice the volume it had been experiencing for 10 years. Regina will fall to a 230-per-cent increase over its 10 year average. Toronto will fall from its greatest year in decades to above what it has been averaging. Halifax will fall to above its average.

Finally, Winnipeg is projected to fall from a 2012 that saw the most starts in more than 25 years to a considerable 44-per-cent increase over its 10-year average.

Housing markets in Canadian cities have cause to celebrate, not worry about a decline from the previous year.

Resale inventories remain low throughout much of Canada, as only Vancouver and Montreal can be considered buyer's markets. Everywhere else is a seller's market, making the new-home option a very attractive one. New-home and resale-home prices continue to increase in every market except Vancouver.

Household growth still will be focused on single-family detached dwellings on the Prairies, whereas the eastern part of Canada tends to focus more on multi-family. At the low end of the single-detached is Vancouver, with Toronto, Ottawa, Montreal and Halifax not far behind.

Winnipeg leads all of Canada in single-family detached growth, with Saskatoon, Regina and Calgary next in line.

So, although it appears as though new-home starts will experience a decline in 2013, one must remember that the decline is from record numbers this year. The new-home market across Canada will still remain very healthy.

Mike Moore is president of the Manitoba Home Builders' Association.

 

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