New Homes
New Homes
Housing bubble nowhere in sight: minister
Last week, Finance Minister Jim Flaherty reviewed Canada's housing market and looked for any signs of doom and gloom.
To those who claim that Canada is on the verge of a housing bubble, the minister said that he doesn't see it. He may see areas of moderation but not disaster as was experienced recently in the U.S. Furthermore, he wished bad luck to any U.S. hedge funds betting on short-selling the Canadian market.
BMO Economics further substantiated this position by saying that the Canadian housing market is calming, not crashing. Given that some regions have experienced record highs in recent years, it is only natural to expect a slowing in the rate of appreciation.
BMO's research showed that 48 per cent of those surveyed intended to buy a property within the next five years, signalling a high confidence rate in the market.
There have been other indications of a slowdown, but no collapse. Retail sales have softened a bit and recent vehicle sales are running behind last year's levels. On one hand, employment numbers haven't gotten any better; on the other, they also haven't gotten any worse.
Inflation remains extremely low at 2 per cent or lower. The Canadian dollar has fallen a couple of points, hopefully bringing some renewed optimism to a manufacturing industry that has been hurt by the European economic crisis and problems in the U.S.
New home sales and starts projections have the Prairies as the strongest areas of Canada while B.C. appears to be the weakest. There appears to be increased pressure on the single family detached sector given a critical shortage of serviced land available. Infill housing seems to be an option for those large urban centres that have run out of new land supply.
One interesting observation is the growth in apartment starts in Manitoba. This may be the start of a trend or just an item that seems all the more dramatic given the historical lack of apartment availability and vacancies.
The renovation industry remains strong despite a slight decline across the country. The DIY market continues to grow in concert with the demand for larger projects that require professionals.
In conclusion, all indications are that the housing market will remain strong and stable for years to come. The naysayers who continue to predict doom and gloom will have to wait some more.
Mike Moore is president of the Manitoba Home Builders. Association.
New Homes
Late spring, but not too late to view show homes
It took a while, a very long while, but it appears that spring is finally here. And, who knows? Summer may be just around the corner.
We've all been trapped indoors for what seems like forever. The snow was piled over your head, it was cold and you didn't feel like going outside, no matter what the attraction. You may have missed the Spring Parade of Homes because you just couldn't motivate yourself.
Fear not, it isn't too late to visit those fantastic new homes and find the perfect place. Now that things have warmed up a bit, you can take full advantage of the opportunity to see new homes with their new ideas.
Almost all of the 124 show homes that were on display during the Spring Parade of Homes are still available for viewing. The only difference is that you don't have to put on boots, a down-filled jacket and a hat.
A leisurely weekend afternoon or one day after work is perfect for touring various new neighbourhoods to see what the finest builders in Canada have to offer. In fact, without the crowds, you have more time to talk to sales agents and learn more about the various amenities of the homes.
Another nice aspect of touring new homes now is that, with the snow gone, you can envision the full landscaping of the yard with potential flowers and plants that you prefer being placed in strategic locations.
You can purchase this style of home on another lot within the neighbourhood or somewhere else, completely done to your tastes. You may love the d©cor of the show home or want something entirely different. The choice is yours.
Of course, you might just be touring show homes to get the best ideas and concepts in products or design for a renovation project on your existing home. That's fine too, as the sales agent can tell you about the appliances, flooring, cabinets, countertops and various fixtures.
After collecting all of this information, you just may decide that you want it all.
So, now that we can actually venture outside comfortably, take full advantage of the opportunity to visit the new show homes in our most dynamic new neighbourhoods. You might just find your new home.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
A closer look at Winnipeg's housing market
Free Press reporter Bartley Kives wrote last weekend about city planning and a recent move to more densified housing, even in the suburbs.
Of particular note were the housing starts in Winnipeg for the first four months of 2013. There have been 766 multi-family starts as opposed to 680 single-family detached starts.
Add to this mix discussion of tower structures along the Assiniboine River and in the heart of downtown and one could think Winnipeg is going all metro Toronto where the great majority of residential construction is in the multi-family department.
Before we go too far along in this premise, we should clarify something.
First, the 680 single-family starts represent a more than 20 per cent increase from last year, one of the best years in history. So, it is very clear the growth in multi-family dwellings is not coming at the expense of single-family housing.
Next, this trend in balancing housing types is something relatively recent. However, it does look like it will continue.
Multi-family starts in Winnipeg averaged about 400 units annually throughout the 1990s. It wasn't until 2007 that we cracked the 1,000 mark and, with the exception of 2009, the popularity has continued to grow: There were more than 1,300 units in 2010 and 2011.
Last year saw almost 2,000 units with projections for this year and next year to surpass that mark.
Single-family detached starts averaged around 1,100 throughout the 1990s and increased to 1,700 for the next decade. Starting in 2010 and forecasting through 2014, the number of single family starts in Winnipeg should consistently be in excess of 2,000, an almost 50/50 split.
So, even though multi-family housing is growing at a significant rate, it is not at the expense of the single-family sector. What is the proper mix? That is for the consumer to decide. People will buy what they want to buy.
Winnipeg is not a 'build it and they will come' city. We build based on demand, not outrageous speculation. Consumer demand will help direct developers and builders provide a product the consumer wants.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
U.S. housing recovery impacts Canadian market
Many people think the recent U.S. economic and housing crisis was a stand-alone event that had little or no impact on the Canadian market. That's simply not true. It played a big part then, continues to do so now and will likely do so in the future.
When spending, manufacturing and hiring slowed to a crawl south of the border, so did the rate of inflation. One of the primary differences between our two countries was that Canada continued to build and grow through the recession and recovered fairly quickly, whereas the U.S. did not.
However, inflation remained similarly low in both nations. Canada's inflation rate is expected to hover around two per cent for a couple more years. Price-sensitive buyers for all consumer goods are happy with the stability but concerned about the lack of immediate return their investments.
The collapse of the U.S. housing market from 2006 to 2011 was unparalleled. It's just now beginning to rebound, and we will feel the effects of this recovery in Canada. It's just been in the past year that new-home starts began to surpass the rate of completion.
When nothing was happening south of the border, suppliers looked to Canada to purchase building materials, and the prices were good. Now that the U.S. housing recovery is underway, suppliers will not be fooled into extending unlimited credit again and will increase prices rather than risk long-term commitments.
There are many examples of commodities being affected by this shift.
Even though supply may have increased, prices have also increased. When building-material demand increases in the U.S., there's a concern about the availability of supply in Canada from the larger American suppliers. This has a tremendous impact on the renovation sector, a huge segment of the Manitoba economy.
The most comforting observation is new-home prices in Canada have not moved out of line with disposable income. Although the resale market has had some dramatic ups and downs across the country, the new-home market has trended steadily upwards. Only Vancouver and Victoria have gone against this trend, with declining prices.
It will be fascinating to watch the recovery and growth of the U.S. market over the next decade, all the while being aware of the impact it is sure to have on us.
Mike Moore is president of the Manitoba Home Builders' Association.
