We reported last week resale home sales in Winnipeg for the month of November increased a whopping 42 per cent over the same month last year.
We also indicated the new-home market is heavily dependent upon used market sales to stimulate starts and the purchase of new homes. What we didn't know was whether that would be seen in new-home starts in November.
We are pleased to report single family detached home starts in Winnipeg in November increased 44.2 per cent in 2009 from 2008. The latest statistics from Canadian Mortgage and Housing Corp. indicate the single family detached segment of the new home market is in the process of rebounding from an early year slump.
Hopefully, it will also continue to reflect the close affiliation between used-home sales and new-home starts.
CMHC senior market analyst Jeff Powell commented the November surge, which followed a positive October, suggested the improving market for single family detached homes. Of course, let's also give credit to an unseasonably balmy November, which permitted elevated construction levels.
After having an essentially washed-out spring, it was definitely our turn to catch a break in the weather. Even though the temperature has dropped considerably this month, work is still proceeding at full pace.
The successful Fall Parade of Homes was also a significant contributor to the upswing in starts. Although most of the interest will be reflected in post-Parade sales and starts in the new year, there were a number of builders able to take advantage of the extended fall season.
Although the single family market is on the upswing, multi-family starts continue to lag behind last year's pace. This was projected a year ago and, although disconcerting, adjustments are being made accordingly.
A multi-unit project tends to be considerably larger in scale, whether it be an apartment building or a series of condominiums. Therefore, unless the builder is confident of a large percentage of pre-sold units, he would not venture into this type of new project.
There was also an inventory of units available from the 2008 construction season. Therefore, the demand was not as high in 2009.
Saying that, if the starts and sales trends continue to move in the current positive direction, consumers can anticipate an increase in multi-family starts sometime next year and into 2011. With the record low apartment vacancy rate in Winnipeg, this segment cannot stay dormant for too long.
Similarly, the condo lifestyle continues to increase in demand and there are a variety of projects throughout the city on the drawing board.
Given the economic hardships the entire country experienced in late 2008 and early 2009, new home start numbers will certainly show an overall decline when the final figures for the year become available in early January.
However, another positive month will certainly go a long way in re-establishing consumer confidence and the strength and resilience of the residential construction industry in Manitoba.
Mike Moore is president of the Manitoba Home Builders' Association
