New Homes
New Homes
New, resale markets expected to stay strong
Preliminary housing start numbers in the Winnipeg Census Metropolitan Area for the month of March were up significantly over last year. Single-family detached houses were up by 44 per cent, while multi-family units almost doubled last March's total.
Given that the start numbers for January and February were slightly behind last year's pace, the good news from this past month served to keep new housing numbers on par with what was the best year for new-home starts in more than 25 years. All indications are that 2013 and 2014 will be comparable to last year.
Although consumers have become generally more cautious across Canada, optimism remains strong in Manitoba. Given the high demand for resale houses in Winnipeg, the purchase of a new home remains a sound investment.
Alberta and Manitoba now have the strongest resale markets in Canada. Given the extremely low number of listings per capita in Winnipeg, demand will continue to be high.
The renovation market also remains solid. Given that Winnipeg has the third-oldest housing stock in Canada, and the penchant for living in the 'old neighbourhood' that Winnipeggers seem to have, we continue to lead the country in intentions to renovate. More than 58 per cent of us have indicated a project on the horizon this year.
Other factors having a positive influence on the residential construction industry are population growth and interest rates. Last year, Alberta (three per cent), Saskatchewan (two per cent) and Manitoba (1.2 per cent) were the provincial leaders in population growth, all ahead of the national average of 1.1 per cent.
Mortgage rates are projected to continue at current low rates. The U.S. is not likely to change its rates until unemployment gets under control, somewhere in 2015. Therefore, rates are not likely to move much in Canada either.
Where the government and lenders have impacted new-home purchases is in the area of tightened credit conditions. Hopeful buyers, especially first-time buyers, will have to satisfy increased lender standards.
Any softening of the market on a national scale is projected to occur in the high-rise market in a couple of Canada's larger urban centres. Given that our market presents a healthy balance between single-family detached and multi-family, and that our multi-family is not dependent upon high-rise, the Winnipeg and Manitoba new home markets are projected to remain strong throughout this year.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
Cheapest reno deal not always the best
Home renovations continue to be a popular topic in Winnipeg and across the country.
The fact that our city has the third-oldest housing stock in Canada (behind Halifax and Montreal) generally translates into the need for renovations. In fact, more Manitobans have indicated their intent to renovate their homes this year than any other province.
Perhaps it's in our nature to see something absolutely fabulous at the Kitchen Bath and Renovation Show, Home Expressions or the Parade of Homes and want to introduce that concept into our owns homes.
If you take the necessary steps to avoid certain pitfalls a renovation can be both exciting and rewarding.
First, remember that the cheapest deal is not necessarily the best deal. This is a close-knit community, so everyone knows someone who knows someone who is handy with a hammer, and that someone may be willing to do the job on the side for cash, no questions asked.
Just think of the money you can save by not paying PST and GST. You'll save even more by not taking out permits, fiddling with cumbersome contracts or worrying about insurance.
Bad ideas all around.
A RenoMark renovator provides a detailed written contract for all jobs. Why is this important? If you don't have a contract, you don't have any control over the scope of work to be done. Furthermore, when the job is finished, you don't have any proof the job was ever done. If there's a problem with materials or labour, you're left holding the bag.
A RenoMark renovator takes out all necessary licences and permits and carries $2 million in liability insurance. Why is this important? If you don't take out the required permits, the job never legally happened. In the event of an accident, fire, flood or other problem, you may find you are not insured for damage.
Whoever takes out the permits is the prime contractor. If someone tries to talk you into putting the permits in your name to save money, you're on the hook for all liability insurance, worker's compensation and other expenses.
A RenoMark worksite is a safe and professional worksite. Anything less is not worth the risk. Consult the RenoMark (www.renomark.ca) and MHBA
(www.homebuilders.mb.ca) websites for more information.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
Prairies seeing increase in first-time buyers
A recent Pulse survey was conducted by the Canadian Home Builders' Association with assistance from the Canadian Mortgage and Housing Corporation and Natural Resources Canada. The survey was nationwide and involved new-home builders and renovators.
We will be looking at the combined results from Manitoba and Saskatchewan.
Combined new-home starts are projected to be almost identical in 2013 to what occurred in 2012, which was an extremely positive year. Given that numbers for the rest of Canada are expected to dip approximately eight per cent, this bodes even better for the Prairies.
Similarly, renovators in these two provinces are expecting an increase in activity for this year, with one-third expecting an increase and the other two-thirds anticipating business to be about the same.
Full-time employment in the residential construction industry is expected to be up over a year ago. As stated in earlier columns, the entire construction industry is experiencing a shortage in skilled labour.
One interesting occurrence already being experienced is an increase in traffic for first-time home buyers. This may be because of the extremely tight resale market in both provinces that has resulted in fewer listings, competitive bidding and a closer price margin.
Although new-home prices continue to increase in Manitoba and Saskatchewan, they have not typically done so at the same rate as resale homes.
Finally, the survey asked new-home builders about their greatest problems.
Over 50 per cent stated rising serviced lot prices, over 40 per cent stated rising development charges, and over 40 per cent stated shortages in serviced lots. Before the shovel even hits the ground, builders are being hit with expenses beyond their control. These charges, often applied by government-related agencies, are the greatest threat to housing affordability.
The next-highest item mentioned (25 per cent) was the shortage in available financing, resultant from changes in CMHC and Bank of Canada regulations. The feeling is that the knee-jerk reaction to problems in centres such as Toronto and Vancouver resulted in legislation that curtailed activity on the Prairies, where this problem did not exist.
Finally, issues such as code changes, rising building material costs, building code changes and zoning attitudes each garnered over 20 per cent.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
Federal budget contains good news for a change
The recent federal budget announcement by Finance Minister Jim Flaherty has a number of good news commitments assuming all goes according to schedule. In relation to residential construction, there were items which will have a positive impact and a few areas that unfortunately went missing.
Infrastructure improvements are critically necessary right across the country and we see plenty of evidence of these needs in Winnipeg and throughout Manitoba. The long-term commitment by Ottawa for infrastructure funding is very important now and for future generations.
Some communities in Canada are financing community infrastructure by placing additional tax burdens upon new development and resale home buyers. This short-sightedness will result in a halt to economic growth and a decrease in housing affordability for future generations. Infrastructure improvement is everybody's business.
The New Canada Job Grant shows tremendous potential. An investment of $500 million to enhance employment opportunities for skilled labour may be a step in the right direction. Construction in Manitoba will need over 10,000 new entrants in the workforce over the next eight years.
The province of Manitoba recognizes that there is a need to create 75,000 jobs over a similar time period. If employers, provinces and the federal government can work together on this initiative, some of this shortfall may be alleviated.
Assistance offered to small business and the manufacturing industry will not only help produce domestic products that can be used in the construction of Canadian homes, but can also keep Canadians working in this sector, thereby enabling them to pursue home ownership.
One area where the federal budget fell short was in the domestic underground economy. The minister was quite diligent in targeting international tax cheating, but seemed to forget about what is happening at home.
The Home Renovation Tax Credit of a few years ago went a long way in combatting illegal contracting by identifying tax cheats. It was a small-c conservative budget that shows many honourable intentions, including a balanced budget and elimination of the deficit on the horizon. It will take a united effort to accomplish this, not increased rhetoric.
The well-being of our communities depends on more skilled labour, healthy infrastructure and housing choice and affordability.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
Parade showhomes open year-round
The 2013 Spring Parade of Homes ends tomorrow, March 24, and you didn't get to all the homes you wanted to see. Let's face it; the weather didn't cooperate as much this year and the snow was piled high.
Don't worry, you still have plenty of opportunity to visit those fantastic show homes that you missed during the three weeks of Parade. After all, there were 124 new homes on display and it's tough to get to all of them. There simply isn't enough time to do each beautiful new home justice.
If you were like most people, you concentrated on a few subdivisions and visited all of the new homes in that area. However, there were undoubtedly many homes you wanted to see but just couldn't get to in such a short time.
Many people have the mistaken notion that show homes are only open during the Spring and Fall Parade of Homes. In fact, they are 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.
New home sales agents are still in the show homes and ready to share all of the pertinent information you need to make an informed decision about purchasing a new home.
You can still view the official Parade magazine on the Manitoba Home Builders' Association website (www.homebuilders.mb.ca) or the Winnipeg Free Press website (www.winnipegfreepress.com).
The magazine has a listing of all of the homes, where they are located, a brief description of each and the base and selling prices. Whether it was the neighbourhood or the builder or the particular home that interested you, it's all in the Parade magazine.
The important thing to remember is that almost all of the wonderful show homes that you saw during the Spring Parade of Homes are still available for viewing. Create your own personal Parade by visiting some of the homes that you weren't able to get to and revisit those that intrigued you but required more viewing time.
The 2013 Spring Parade of Homes may be ending but the opportunity to purchase your new dream home has just begun.
Mike Moore is president of the Manitoba Home Builders' Association.
