Winnipeg Free Press
Saturday April 10 2004
By Murray McNeill
THE local home-building industry had its busiest March in 14 years after posting 133 single-family housing starts last month in Winnipeg and surrounding communities, Canada Mortgage and Housing Corporation figures released Thursday show.
"Demand for housing is not showing any signs of cooling off," Dianne Himbeault, the agency's senior market analyst for Manitoba, said in a written statement. "As long as mortgage rates remain low, builders will be busy."
The impressive March housing-start numbers are the third piece of good news for Winnipeg's housing sector in the last week.
On Monday, Royal LePage Real Estate Services released a report showing the average selling price of a home in Winnipeg continues to escalate at a double-digit pace in 2004. That's after two consecutive years of double-digit increases in 2002 and 2003.
On Tuesday, the Winnipeg Real Estate Board released its March sales figures, which showed resale homes are still selling like hotcakes in Winnipeg with 75 per cent of the active listings on the board's Multiple Listing Service changing hands in March. That compares to a conversion rate of 30 to 40 per cent as little as three years ago.
On the new-home front, CMHC said the 37 per cent increase in single-family starts in March, coupled with 10 new multifamily-unit starts, brought the total number of housing starts for the month in the Winnipeg Census Metropolitan Area to 143 units -- a 44 per cent improvement over the 99 recorded in March of last year. The high level of activity also kept the pace of new home construction in the Winnipeg CMA for the first three months of this year well ahead of the pace in the same period last year, with a total of 352 starts compared to 333, the agency added.
Himbeault said in interview there's no reason to think mortgage rates will rise anytime soon. On the contrary, in light of March's disappointing job-creation numbers for Canada, most economists are predicting a further quarter-point cut in rates when the Bank of Canada meets again on Tuesday, she added.
She also noted low interest rates aren't the only thing fuelling the demand for new homes in the Winnipeg area.
"A lot of this demand is also being fuelled by population growth. In 2003, Manitoba's population increased at a rate not seen since the mid-1980s and the city of Winnipeg captured a lot of that growth."
Manitoba Home Builders Association president Wayne Bollman agreed low mortgage rates and stronger population growth are helping to boost the demand for new homes.
A third factor is "natural population growth," Bollman said, noting a growing number of baby-boomer offspring are now reaching the age where they're ready to buy a home, which is helping to fuel demand for both new and resale homes. Bollman said the level of construction activity in March was more in line with what he had expected to see at the height of the summer building season.
"They (local home builders) are building them as fast as they can build them for committed buyers."
Bollman said the only dark cloud on the horizon for Winnipeg home builders is the dwindling supply of serviced lots in the southeast quadrant, which is one of the most popular areas of the city for new-home construction. If there aren't enough lots to meet the demand, it could lead to more buyers opting to build homes outside Winnipeg in nearby communities like Sanford, he added.
murray.mcneill@freepress.mb.ca