Last Tuesday, the Canadian Mortgage and Housing Corporation released its housing start projections for Canada and Manitoba for 2011 and 2012. The news was positive from a Canadian perspective and even better for Manitoba.
Looking at the national forecast, chief economist Bob Dugan called for a fairly healthy GDP and low unemployment rates. He called for mortgage rates to remain at or near their lowest levels in the past 50 years.
Dugan addressed the fact that although household debt has risen steadily, assets remain many times larger than debts. In addition, the costs associated with servicing debt are quite low compared to income. He reiterated that, in general, it remains a seller's market in Canada.
Regional economist Lai Sing Louie projected an optimistic outlook for the Manitoba economy. This included continued growth in the GDP and retail sales. He noted that our manufacturing sector was starting to rebound from the past few years, although agriculture was still struggling. Employment remains strong in the province and our positive net migration was paying off with an expanded workforce.
The resale market is projected to continue to be excellent with increases in sales for both 2011 and 2012. With strong financial returns in the resale market, buyers then have the enhanced opportunity to consider building a new home.
Market analyst Fang Quin noted that our city's unemployment rate was among the lowest in the country. Although non-residential building permit values declined slightly in 2010, residential permits skyrocketed.
Concerning the Winnipeg housing market outlook, senior market analyst Diane Himbault noted that resale was back on the rise after a slight dip in 2010 and that Winnipeg active listings were among the lowest throughout the Prairies, thereby enhancing the seller's market.
However, sales were expected to remain above the 10-year average. She projected that single family detached starts would continue to increase slightly in 2011 and 2012, absorptions would continue to keep pace with completions and there would continue to be an increase in the price of new homes, primarily due to the increase in cost of serviced land.
In conclusion, all indications point to a very busy next two years in trying to satisfy the increased demand for new housing and renovations in Canada, Manitoba and Winnipeg.
Mike Moore is president of the Manitoba Home Builders' Association.
