IT was recently reported the City of Winnipeg experienced a record number of housing starts for the month of May. In fact, no single month had as many starts as May of this year since 1989.
The numbers were somewhat staggering if you deal in percentages. This May represented an 80.7 per cent increase over May of last year. Our year to date starts are 49.7 per cent ahead of last year.
What does this mean? Are we in the middle of a tremendous housing boom beyond anything we imagined or is this just the upswing of a standard good year?
There's no arguing 2012 is setting up to be an exceptional year in residential construction. New-home starts are on a pace significantly ahead of 2011, which was also a very good year. Renovation work is also extremely busy as people fix their current homes, either to remain there or improve appearances to maximize its resale point.
Manitoba's economy is good: unemployment is low; interest rates are fantastic with no major increases in sight; Winnipeg's new-home costs are lower compared to much of Canada; immigration is a major boost to our province; and bargain resale homes are very difficult to find.
However, remember that last year at this time we were fighting a flood and much of our efforts went into preventing a disaster. Once that was done, building picked up considerably. This year, we got off to a very fast start with excellent March and April weather. The Spring Parade of Homes was in perfect weather and consumers responded accordingly.
We should also note multi-family starts (condos, town homes, row houses, apartments) more than doubled this year over last. We are all aware of our low vacancy rate in apartments, so any multi-unit construction is going to contribute to a huge demand, not create a surplus. Single-family detached starts are up 20 per cent, a much more reasonable figure.
Therefore, before anyone panics about a housing bubble or crisis by analyzing our numbers, we can see 2012 is going to be a very good year for new-home starts but not beyond anything conceivable.
Things have a way of balancing in Manitoba and our consumers have a very good handle on their spending. An existing need is being filled and will continue to be filled by new-home builders.
Mike Moore is president of the Manitoba Home Builders' Association.
