With hints of a recession coming from the mouths of economists and other financial pundits recently, I wanted to take a brief look at the state of the housing industry across Canada.
I was in Halifax last week and new home builders there are definitely having a tough time. All necessary preparatory work has been done for the large shipbuilding contract; it just hasn't started yet. Therefore, a city that two years ago experienced 1,400 new single-family detached home starts is anticipating only 400 this year. Many of the Maritime provinces are feeling similar pinches. However, six years ago they were also in rough times, but they pulled through. With renovation and multi-family work steady, trades will keep working and I think they will rebound soon.
Ontario appears to be a tale of two regions. Toronto continues to grow in demand and production for condominiums and apartments. Prices continue to increase there, too. This is not just a large Canadian city; it is a large North American city where people continue to want to live and work. The primary deterrent to continued growth is the greed of some municipalities in the Greater Toronto Area that insist on gouging taxpayers with excessive development charges.
Speaking of excessive fees, some other Ontario communities such as Windsor, Hamilton, Waterloo, London and Ottawa have also considered charging their way out of debt on the backs of new home buyers. This "new neighbour tax" has completely halted growth and development in some cities, thereby resulting in lower revenues for the city, not more.
To the west, Regina and Saskatoon are in a slump and it may be a year or two before they rebound. However, we must remember that they recently came off unprecedented, unbelievable, record-setting growth years; four or five in a row. Will they come back to those levels? I couldn't say, perhaps not. Will they bounce back to where they traditionally have been in the next year or two? No doubt about it.
Alberta equals oil. Enough said, however, oil is not going to stay at $50 a barrel forever. I think Calgary thrives on boom and bust as it does it so frequently.
On the left coast, Vancouver is doing quite well in new home starts. Cities such as Victoria and Kelowna, B.C., which were deemed very expensive 10 years ago are quite reasonable now.
Yes, recession rumours continue to surface on occasion. It was prominent in 2009 and the country survived. It comes to the forefront every decade, sometimes more. However, more often than not, it results in a one-or two-year slowdown followed by a burst of economic activity. It's just a question of whether you want to be on the front end of the back end of the recovery.
Mike Moore is president of the
Manitoba Home Builders' Association
