New Homes
New Homes
Homebuilding industry prepared for growth
LAST week, we stared into the national economic crystal ball and saw that Canada is expected to rebound gradually from the recession of 2009. Similarly, housing starts for 2010 were expected to rise slowly but still positively. Manitoba's economic forecast was brighter, but the slow-but-sure approach was very evident.
Given how poorly Ontario, Alberta and B.C. performed last year, it would be natural to assume even the slightest rebound from the big three would dramatically impact our national statistics. After all, in terms of housing starts, whatever happens there has far greater national impact than what happens in the rest of the country.
Although those three provinces will be bouncing back, it will be a long, slow positive trend. The Manitoba forecast by the Canada Mortgage and Housing Corporation continues to be cautiously optimistic. Economic growth is expected to support more housing activity in 2010 than 2009.
Due to the nature of multi-family projects, starts in that sector fell sharply in 2009. Between the needs to finish selling 2008 inventory and to realize the requisite number of pre-sales to initiate a project, multi-family starts fell to 2005 levels of just over 1,100 units. A rebound is anticipated this year and, if the first two months of the year are any indication, the multi-family growth spurt has already begun.
Single-family detached units have always been the mainstay of the Manitoba housing market. Their consistency has been nothing short of amazing.
The provincial inventory of multi-family and single-family detached units hit all-time highs in late 2008. A good portion of 2009 was spent reducing this inventory to where it now sits at levels commensurate with the past 10 years.
Single-family detached starts in Manitoba are projected to increase to just above 3,300 units in 2010 from 3,000 units in 2009, adding another 150 to 200 starts in 2011. Multi-family starts were at 1,132 in 2009 and are expected to increase to over 1,300 in 2010, increasing again in 2011.
The Manitoba residential construction industry is buoyed by the CMHC projections and is cautiously optimistic for 2010 and 2011.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
Canadian GDP predicted to enjoy rise
THE Canadian Mortgage and Housing Corporation recently hosted its Manitoba Housing Outlook Conference in Winnipeg. Hundreds of housing professionals attended the largest such presentation in recent memory, focusing on the national, provincial and local scenes with explanations regarding our past, present and future housing trends.
Chief economist Bob Dugan, in a presentation entitled Housing Market Conditions and Outlook, called for a steady increase in Canadian GDP to 2.5 per cent in 2010 and 3.2 per cent in 2011, with unemployment at just over eight per cent.
Although some concern was expressed over a potential one per cent increase in mortgage rates for this year, it was noted that we have been enjoying the lowest rates in more than 50 years. Previous economic downturns had demonstrated a rise in mortgages in arrears. Not so, this time, as they remain below .5 per cent as they have for more than a dozen years.
One surprising yet comforting statistic that Mr. Dugan put forward was the amount of equity that the average Canadian has in their house. His estimate was that nearly four in 10 homeowners have 30 per cent or more equity in their homes, considerably higher than our American counterparts.
Another CMHC presenter was Lai Sing Louie, a regional economist who presented information on the Manitoba economic scene. It was acknowledged that our province's GDP fell almost one per cent in 2009, but the forecast is for positive growth of between two and three per cent in each of 2010 and 2011.
The recent momentum in Manitoba's retail sales market shows confidence in the economy and is a good indicator for larger purchases. A 3.1 per cent increase in Manitoba average weekly wages in 2009 supports the theory of increased spending.
In addition, Manitoba's unemployment rate is projected to remain below the national average. Our net migration numbers are among the best in country and show no signs of slowing down. Another positive aspect is that our interprovincial migration is netting out near zero.
This is likely due to the fact that those provinces which historically have attracted Manitobans (B.C., Alberta) were hit much harder by the recent recession and the job and living outlook was far better in Manitoba.
Mike Moore is president of the Manitoba Home Builders' Association
New Homes
Follow local budget plans closely
THE proposed provincial and City of Winnipeg budgets were recently released, each praised in some circles and criticized in others.
The provincial budget was a deficit budget, and the government is in fact projecting deficits until 2014. That's a long time, and media editorials have warned that this could delay or eliminate new programs such as tax cuts while requiring increased user fees. Winnipeg city council approved an operating budget on March 23 that once again froze property taxes.
It's been suggested both budgets are election budgets, with a city vote this October and provincial elections a year later.
Given the inevitability of increased fees and budget deficits, it's interesting to look at what's going on in other jurisdictions and draw comparisons.
The U.S. still has a very long road to recovery. The dollar has been falling steadily over the past few months and some are calling for it to stay at its current rate for an extended period. Employment is likely to be the key to their recovery.
B.C. and Ontario will be implementing the Harmonized Sales Tax effective July 1. The entire country is anxiously watching to see the economic impact on theses provinces and the rest of Canada. Home ownership costs are definitely going to increase. In Nova Scotia, the government which has been in office less than one year is already considering increasing its HST by two per cent.
The federal budget plans to cut back the deficit by reducing spending and supporting economic growth, while not raising taxes. Finance Minister Jim Flaherty expressed confidence in the housing market, refusing to implement some suggestions that would make owning a new home more onerous.
Unfortunately, the popular Home Renovation Tax Credit will not be continued. Bank of Canada governor Mark Carney has called for a modest increase in interest rates in the near future with a 'wait-and-see' attitude regarding another increase in the fall.
So, we're all well advised to follow our local budget plans very closely. We can learn a great deal from neighbouring cities and provinces, both good and bad. Sometimes, slow and steady allows us to learn from the mistakes of others before rushing in to be first in line.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
Show homes welcome you year-round
THE 2010 Spring Parade of Homes has ended but you still have plenty of opportunity to revisit those fantastic showhomes that you saw during the two weeks of Parade.
The weather was perfect this year and Manitobans responded in kind as record crowds visited 95 new homes by 38 builders in 30 subdivisions in 11 cities and towns. It was a whirlwind tour for many and one couldn't be expected to visit every home, no matter how hard you tried.
Many people have the mistaken notion that showhomes are only open during the Spring and Fall Parade of Homes. In fact, they're open year-round and, although the hours may not be the same as during Parade, they are able to accommodate all interested clients. So, now that your interest in a new home has been piqued by the Spring Parade, the timing is perfect to follow up with another visit.
Although you undoubtedly received an excellent welcome and introduction to each new home, it was probably quite busy. It may have been difficult to have a private conversation with the sales representative regarding the amenities of that home. Now that you have visited the best new homes in Manitoba, you likely have a number of questions you'd like to ask.
If you took an information piece from the home, it will have the contact number for the sales representative. Call and set up a private viewing. This will give you an opportunity to view in more detail and have a one-on-one conversation without interruption.
If you don't have the direct number but recall the name of the builder, they can facilitate your meeting. If you recall the neighbourhood but not the specific house which interested you, the entire Parade of Homes magazine is on the Manitoba Home Builders' Association website (www.homebuilders.mb.ca) or the Free Press website www.winnipegfreepress.com.
The important thing to remember is that almost all of the wonderful showhomes you saw during the Parade are still available for viewing.
Create your own personal Parade by visiting some of the homes that you weren't able to get to in the past two weeks, and revisit those that intrigued you but require more viewing time.
The 2010 Spring Parade of Homes may be over, but the opportunity to purchase your new dream home has just begun.
Mike Moore is president of the Manitoba Home Builders' Association.
