According to a recent Housing Market Outlook report by the Canada Mortgage and Housing Corporation, the three Prairie provinces will combine for a marked decline in starts in 2015 and 2016.
However, one of the provinces (Manitoba) and one of the major cities (Winnipeg) will be doing just fine, with no decrease in starts.
In Alberta, new home starts are expected to decline by 3,500 units in 2015 and another 3,200 in 2016. Much of this drop is expected to happen in Calgary, the city most affected by the drop in oil prices. Edmonton isn't far behind, as both cities are running even over the next two years. This came after an exceptional 2014 in Calgary. Edmonton peaked the year before.
New home starts in Regina fell by more than 30 per cent last year and are expected to drop another 10 per cent this year and again in 2016. Saskatoon will reach double digits this year and then stay flat for another year.
Not so in Manitoba and Winnipeg. Although there was a decline in 2014 after all-time record highs the two previous years, new home starts remain consistently steady for the next two years.
Similarly, whereas MLS average prices are expected to decline in the four major urban centres in Alberta and Saskatchewan, they will continue to increase in Winnipeg and throughout Manitoba. Remarkably, the average home in Winnipeg still runs $27,000 less than in Regina, $61,000 less than Saskatoon, $82,000 less than Edmonton and a whopping $171,000 less than in Calgary.
Maintaining housing affordability is critical to the strength of Winnipeg. New Canadians need to be able to afford to move here. Our young people need to be able to purchase their first home. Renters aspire to home ownership.
New home starts mean jobs for trades, manufacturers and suppliers. More than 25,000 Manitobans rely on the housing industry for their jobs.
The inventory that was created in 2013 will be gone by this summer, so the demand for new and resale housing will again rise locally. With increased demand comes increased prices. New home prices are very reasonable right now, and the resale market hasn't had the current sales-to-listings balance in more than a decade. The buying opportunity has seldom been better. Unlike our neighbours to the west, the value of our housing continues to increase.
Although one doesn't generally think of their home strictly as an investment, it's still a solid one. Combining lifestyle with return on initial investment is a winning payoff.
Mike Moore is president of the
Manitoba Home Builders' Association.
