Lai Sing Louie — regional economist with the Canada Mortgage and Housing Corporation (CMHC) — delivered a forecast for both Winnipeg and Manitoba’s housing industries at the recent Manitoba Home Builders’ Association Housing Forum. This annual presentation plays an important role in the anticipated workload for the residential construction industry.
Manitoba’s GDP is projected to be steady — averaging just above the two per cent increase mark — meaning we should only trail British Columbia. We are still too heavily reliant upon government spending and employment compared with our neighbours, however, it appears that the provincial government is taking steps to remedy this.
Retail sales continue to climb and exports remain steady. Net migration may continue to decline slightly as average family sizes decrease. The five-year mortgage rate may increase slightly over the next year or two, but it will remain at historically low levels. Since 2011, we have seen the percentage of first-time homebuyers between the ages of 25 and 34 double. This positive trend should continue in Manitoba, although everyone is keeping a close eye on the impact of the recent federal changes in mortgage rules. Provincial single-family detached starts are expected to continue to climb, albeit at a slow, steady level of 100 to 300 units per year for the next couple of years. Multi-family starts will remain flat for a few more years after the boom in 2014 and 2015. Slightly more than half of all starts in Manitoba will be single-family starts. Winnipeg is not expected to experience quite the same increase in new home starts as the rest of the province. Since it’s more reliant on multi-family housing, Winnipeg will be somewhat flat as the only growth could be in single-family detached.
On the resale market, both Manitoba and Winnipeg will have sales-to-new listings ratios within the balanced market ranges. There will continue to be gradual increases in average prices and number of sales, making housing a solid investment for Manitobans. We have not and will not be experiencing some of the decreases in housing values seen in Saskatchewan and Alberta.
To be fair to the forecasting experts of CMHC, this forecast was prepared in advance of, and did not take into account, the proposed City of Winnipeg Impact Fee or Growth Tax. It would be fair to assume that if this measure were implemented, City of Winnipeg start numbers would decline significantly while starts in areas just outside the city would show a marked increase. This would still likely result in an overall decline for the Province of Manitoba, thereby also impacting provincial retail sales and GDP numbers.
Mike Moore is president of the Manitoba Home Builders’ Association.