New Homes

New Homes

Cautious building trend? Not in my Canada

I am going to use this week's column to vent a bit about what constitutes Canada.

I just finished reviewing a document by a reputable private-sector real-estate research and consulting group that cautions the Canadian new-home construction industry regarding future development.

In their short paper, they note that new housing starts are on a par with 2010, which was up 27 per cent from 2009. It also notes that prices are increasing in line with inflation and resales are within the 10-year average. The report also concedes the Canadian economy appears to be performing better than many developed countries.

So, what is the problem that warrants caution?

My first move was to break this down regionally. After all, if Canada is in a caution mode, there must be widespread regional concern.

Well, it's certainly not to be found in Newfoundland, as St. John's has been enjoying unprecedented economic growth and prosperity as reflected in their increased new home starts.

Halifax is showing optimism not displayed in decades. Quebec had a very good year in 2010, and there's no appreciable difference noted for this year.

Saskatchewan has been experiencing the most robust economy in Canada, and Edmonton is bouncing back from some tough times.

Toronto has a very strong condominium market, but there's concern that there is very little resale inventory on the market and not as many people will be buying.

Ottawa is a troubled market experiencing declines, and Calgary remains in a 'bust' phase. B.C. and Vancouver are in wait-and-see mode -- with the pending elimination of the HST, no one is going to make a major purchase until the harsh economic penalties are fully removed.

So, from all that roundup, this research group concludes that Canada is in a cautionary mode. Well, I contend that Canada is more than Ottawa, Calgary and B.C. We have five provinces that are doing exceptionally well, we have parts of other provinces that are either holding their own or starting to rebound, and then we have a few major centres that need to exercise caution.

Canada is much more than three or four urban centres. I appreciate their numbers can impact everyone else due to their size, but my Canada recognizes the uniqueness and strengths of every province.

When one considers every region of this great country, my Canada is doing quite well.

Mike Moore is president of the Manitoba Home Builders' Association.

Mike Moore
November 26

New Homes

Never been a better time to build a new home

THE latest housing forecast summary was released by the Canada Mortgage and Housing Corporation last week and the news is good for all aspects of housing in Winnipeg and Manitoba.

New-home starts in Winnipeg in 2011 will be on a par with the numbers achieved in 2010. Before you ask why standing pat at last year's pace is considered good, you should know that last year represented the most new- home starts in Winnipeg and Manitoba in the past 23 years ---- 3,244 and 5,888 starts respectively.

Overall, starts in Manitoba outside of Winnipeg were reforecast to be down slightly this year. This is a logical premise given the flooding conditions that existed throughout a significant part of the province.

Housing start numbers will continue to be strong throughout 2012 as there are no signs of easing back.

These numbers will hold true for single-family detached houses and for the multi-family sector. Condominiums, townhouses and row houses continue to be in demand, especially in Winnipeg. The city still has one of the lowest apartment vacancy rates in Canada, making that niche attractive to select builders.

How does Manitoba continue to produce such optimistic numbers? It's a variety of factors, never just one thing. Our unemployment rate continues to be among the lowest in Canada. Our GDP continues to grow at around two per cent. After a long series of double-digit price increases in resale homes, 2011 will represent an increase, but a softer one at around four per cent. New-home prices are increasing at approximately the same pace.

One interesting factor to note is that the price of land has been increasing much faster than the price of a new home, primarily due to some externally imposed charges that will be addressed at a later date. Inventory in single- and multi-family homes is quite low so there is very little on the market not already spoken for.

Given that the price of a resale home in Winnipeg is $67,000 less than in Saskatoon and $161,000 less than Calgary, this is still one of the most affordable places in the West to buy or build a new home. All indications for the rest of this year and 2012 are that there's never been a better time or place to build a new home.

Mike Moore is president of the Manitoba Home Builders' Association.

Mike Moore
November 12

New Homes

Slow and steady approach serves province well

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.

Mike Moore
November 5

New Homes

Manitoba leads way in home renovations

FOR almost 20 years, the Canadian Home Builders' Association has been promoting October as Renovation Month across the country. It is the only countrywide marketing campaign dedicated exclusively to Canada's renovation industry.

In addition to the national campaign, each local home builders' association develops its own unique way of promoting the industry. The Manitoba Home Builders' Association is also extremely proud of the excellence of the renovation industry and the members promoting it.

As has been mentioned previously in this column, the MHBA introduced the first virtual RenoMark Renovation Parade last year. Ten highly informative and unique videos featuring terrific renovation projects by some of Manitoba's top renovators can be viewed on the MHBA website at www.homebuilders.mb.ca . Just look on the left side of the home page under Virtual Renovation Parade, click and enjoy.

In addition to the Parade, our annual Renovation Awards are also in full swing. This year, we are proud to present 42 separate renovation projects by 10 different professional renovators. Judging by a panel of experts will take place next week, with the RenoMark Renovator Awards Night on Friday, Nov. 4.

Manitoba has always been the leader in home renovations in Canada and the market continues to be strong here. Given that Winnipeg has the third-oldest housing stock in Canada, home renovations are an important component to our residences.

New ideas are featured at the Fall Parade of Homes and the tens of thousands of visitors look to see how they can incorporate new designs, colours, features and materials into their existing homes. Suppliers to the new home industry brought out their best during the Parade and now consumers want to know how they can update their homes with a renovation.

As always, the Manitoba Home Builders' Association and our RenoMark renovators urge everyone to get your renovation agreement in writing. Make sure that your contractor outlines all costs in advance so that both parties know what to expect.

If you are at all in doubt as to what to ask and what to look for in a renovator, go to the RenoMark website at www.renomark.ca/Manitoba and follow the guidelines posted.

Mike Moore is president of the Manitoba Home Builders' Association.

Mike Moore
October 29