Last week, as you may recall, we shared a housing outlook created by the Altus Group, a prominent housing research group.
In this report, Altus looked at 10 major urban centres in Canada and projected their housing status based on a variety of factors. In that column, we looked exclusively at the other nine cities. This week, we’ll analyze their forecast for Winnipeg.
The average gain in employment numbers has been 4,700 per year from 2006 through 2015. This dropped drastically to only 600 in 2016 with an increase to 2,200 expected this year and 4,300 next.
Although these numbers are not to the depths of Calgary, Edmonton, Saskatoon or Regina, it may be a number of years before we even reach the level of the past decade. The resale home numbers are expected to be the same in 2017 as in 2016. Although to some that represents a flat market, to others it indicates stability.
Of course, Alberta cities are showing greater percentages of sales than us — they have also been rising from the depths of despair over the past few years.
Strangely enough, Winnipeg is at about 3.5 months of resale inventory. For a city our size and a market this stable, that number is a bit low.
After all, wasn’t it the Canadian Mortgage and Housing Corporation that gave us a cautionary yellow mark for an overage of inventory?
My fear is that the inventory will continue to decrease, thereby driving up the prices of homes. It was only a few years ago that we experienced bidding wars and double-digit price increases.
The immigrant population, young people and first-time homebuyers do not want to see that or they may be forced to live elsewhere.
New home prices are only projected to increase by 2.5 per cent, but that is among the higher percentages in Canada.
Throughout most of the country, new home prices are fairly flat.
However, when one considers that almost 80 per cent of that price increase can be attributed to the amount of the Impact Fee, Winnipeg then falls in line with the rest of the country relative to the true cost of the new home.
The Altus Group projects new home starts will increase in 2017 in Winnipeg and fall back by 600 units next year.
Of course, this still manages to eclipse our 10 year average.
The biggest difference is that we didn’t have as robust a market in the Census Metropolitan Area surrounding Winnipeg back then. For the foreseeable future, growth in the capital region appears attractive to the new home buyer.
Manitoba and Ontario — once national leaders — are the only provinces where the Altus Group has called for a reduction in new home starts in 2018. What they don’t see is that Manitoba is still the best place to build a new home in Canada.
Mike Moore is president of the Manitoba Home Builders’ Association.