The first six months of 2012 are over and it seems to be a good time to review the new home market statistics.
Last year was a tremendous one for starts in Winnipeg and throughout the province. Although some areas were understandably sluggish due to flood-fight conditions, 2011 represented the most new home starts in one year since 1987. In fact, there were slightly over 6,000 starts in Manitoba last year.
Early projections for this year called for an increase of about 100 units from last year. The single-family detached sector would remain steady while the multi-family would carry the bulk of the increase. That being said, the increase would only amount to about three per cent.
However, 2012 started out extremely fast with the first quarter vastly exceeding expectations. This pace, almost impossible to maintain, has remained strong throughout the second quarter, to the point where we are able to analyze the first six months as a whole.
The City of Winnipeg is enjoying growth in single-family detached starts from last year that is slightly ahead of projections, whereas the new development areas surrounding the city have experienced tremendous growth. Winnipeg has doubled its production of multi-family units from last year, thereby accounting for almost the entire growth in that sector for the province.
The Canada Mortgage and Housing Corporation remains confident that new home production for 2012 will continue to flourish and finish above 2011 levels. Winnipeg's growing population is creating the need for new housing.
Some experts have called this a "trickle-up" effect where people are moving from rental to resale to new housing as their financial status relating to equity improves. Projections of continued low mortgage rates are enabling people to take advantage of opportunities for new home ownership.
This growth pattern is also evident in the resale market where increased sales and prices continue to exhibit the strength of our Winnipeg and Manitoba markets. The first six months have been very good for sales with a shortage of listings being the only deterrent from even greater numbers. The demand for new and used homes is definitely evident in our local markets. Availability continues to be impacted by the number of listings in various neighbourhoods and an ongoing demand for skilled labour.
If one can project the rest of the year based on the first six months, this year is going to be another strong year for new home starts in Manitoba, both in the single-family detached and multi-family sectors.
Mike Moore is president of the Manitoba Home Builders' Association.
