New Homes

Steady long-term increases in housing market spell success

A look at housing starts in Winnipeg for the first half of 2013 shows that we are on pace to match last year's solid performance.

Single-family detached starts are tracking almost 200 above 2012, while multi-family starts are up 71 from last year.

One could argue that the numbers are flat or one could argue that they are consistent. Either way, the market remains strong. This scenario plays out very similarly throughout the province.

The rest of Canada, to borrow from Charles Dickens, is a tale of two cities. Housing prices have been stable in Atlantic Canada and across the Prairies, but Vancouver has seen prices drop by about five per cent. This is due to the somewhat irrational splurge in Vancouver's condo market in that centre which led to Ottawa tightening mortgage rules. In Toronto, prices have levelled out after some recent dramatic increases.

As I've said many times before, numbers from these two cities can completely skew the Canadian picture. When you consider that Toronto is increasing in population by about 125,000 a year, you can see how overwhelming an impact the city has on an overall Canadian analysis. If Toronto and Vancouver decrease by five per cent, even though the rest of Canada remains level, the Canadian market will show a two- or three-per-cent decline.

However, no matter how one looks at these numbers, there is no evidence of a housing bubble in Canada. The over-building and price spirals that took place in the United States and some of Europe are not happening here. Nor is Canada experiencing the over-abundance of office-building and shopping-centre construction that accompanied the unwarranted housing starts in those areas. So, do not mistake our national two- to three-per-cent drop in prices in two urban centres with the massive numbers that occurred south of the border.

Canada's unemployment rate continues to be under control. Household net worth continues to soar to new heights. Immigration numbers also remain strong. Plain and simple: Canada is a great place to live.

Housing in the Canadian market remains a strong investment. Fixed-income investments such as GICs and bonds have recently produced low returns, and commodity stocks have also not done well. Even gold and oil are down from recent highs. For steady, long-term increases in value over time in a productive, safe and reliable market, it's tough to beat the performance of a Canadian home.

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


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