I just returned from the fall meetings of the Canadian Home Builders' Association and it was extremely interesting to hear current trends and future projections on both regional and national levels. We tend to be isolated in Manitoba, given that we have enjoyed steady growth and strong employment for some time.
All indications are that Canada will continue with its solid economy with a 2.5 per cent growth rate in 2012. Interest rates for new home mortgages continue to be at staggeringly great rates in the four per cent range and will likely stay in that neighbourhood over the next three or four quarters.
With our national full-time job growth exceeding our part-time job trend, Canadians will be in an even better position economically as it relates to the purchase of a new home. Uncertainty about the European economic situation tends to promote caution, but that's our style anyway.
New-home prices are still on an upward trend throughout most of Canada and definitely in Manitoba. The Canadian average projection is around 2.5 per cent with British Columbia being the only exception. The confusion caused there by the implementation and then the repeal vote of the Harmonized Sales Tax has brought the new-home market to a standstill.
Very few people are making major purchases until the previous tax regime is restored so that they can save money that would otherwise be taken away by the HST.
Manitoba seems to be bucking a national trend in renovations. Where other provinces have experienced a slight decline in renovation spending after the sale of resale homes, we still want to renew and revitalize before assuming full possession. This may be a product of our older housing stock.
Housing starts in Canada continue to grow. Projections for 2011 exceed 190,000. Much of this optimism is based on the Toronto and Calgary condominium markets combined with a surge in the resale market.
In Manitoba, we enjoyed 5,888 new home starts in 2010. All indications are that this year is tracking close to last year, a year in which we had the most new home starts in 23 years.
Given our natural aversion to risk, this slow and steady approach to big-ticket spending has served us well in recent years and will continue to do so in the future.
Mike Moore is president of the Manitoba Home Builders' Association.
