Recent housing reports and economic projections for 2020 are providing Manitoba’s residential construction industry with some optimism for the upcoming year. This is welcome news following two years of declining single-family housing starts and challenging market conditions.
According to the Canadian Mortgage and Housing Corporation (CMHC), housing starts in Manitoba at the end of November were down eight per cent overall compared to the same time frame in 2018. Single-family housing starts were 12 per cent lower than in 2018, and multi-family starts were six per cent lower than in 2018. Manitoba, especially Winnipeg, had seen significant growth in purpose-built rental apartments and multi-family condos in 2018 and early 2019. CMHC numbers would indicate this trend slowed considerably in the latter half of 2019. The impact of the federal mortgage rules, slower immigration numbers and slower economic growth all had an impact on overall housing starts over the past 12 months.
However, recent reports show a growing level of optimism in Manitoba’s new-home construction market. Re/Max’s 2020 market outlook for Winnipeg forecasts a balanced housing market, with the average residential sales price expected to grow by two per cent in 2020, with move-up buyers and first-time buyers entering the market at a greater pace than in 2018 or 2019. This is welcome news for potential homebuyers, as other major Canadian cities are seeing housing prices forecast to rise at double or triple that rate. As well, Re/Max’s report suggest more new Canadians will be looking for homes in Winnipeg, with immigration numbers expected to increase in 2020. This will mean an increased demand for all types of housing in Winnipeg.
According to the Altus Group’s latest housing report, demand for new single-family homes in Winnipeg will rebound in 2020, improving over 2019’s results and slightly above the average our market has seen over the past 10 years. Altus Group forecasts Winnipeg will see 2,925 new single-family starts in 2020, up from the 2019 year end forecast of 2,400. At the same time, Altus Group is forecasting apartment starts will decrease by 150 starts compared to 2019. Both Altus Group and Re/Max are forecasting Winnipeg will maintain a four-month housing inventory throughout 2020, even with the expected increase in demand.
These reports suggest that while Winnipeg will experience an increased demand for new housing in 2020, new housing stock should be available to meet the increased demand. This will help keep our local housing market at a balanced level, even as our population continues to increase, and should help alleviate any potential sharp increases in the average price of buying a home, either new or resale, in Winnipeg over the next year.
Lanny McInnes is president of the Manitoba Home Builders’ Association.