Busiest July in region in 13 years
Winnipeg Free Press
Wednesday Aug 11 2004
By Geoff Kirbyson
THE local home-building industry had its busiest July in 13 years after posting 291 new housing starts last month in Winnipeg and the surrounding area, according to new figures released yesterday by Canada Mortgage and Housing Corp.
CMHC said the new housing starts this July were 43 per cent higher than during the same month a year ago.
Total single-family starts in Winnipeg and communities such as Headingley, West St. Paul, East St. Paul, Springfield and Tache/Ritchot were up 14 per cent on a year-over-year basis. Starts within the city itself were down five per cent but that was more than compensated for by a 22 per cent increase in starts in the bedroom communities, CMHC reported.
In another sign of the continued strength of the local real estate market, Winnipeg posted the highest month-to-month increase (3.9 per cent) in the country in June in the asking price for new homes, and the second-highest year-over-year increase (8.5 per cent), according to Statistics Canada figures released yesterday.
Only Victoria, at 9.7 per cent, had a higher 12-month increase among the 23 cities surveyed, the figures showed. And the May-to-June increase was more than five times the national average of 0.7 per cent.
Albert Near, survey analyst at Statistics Canada, said the Winnipeg market hasn't been this hot since May 1992, when the 12-month increase was also 8.5 per cent. He said at least part of the house price appreciation can be attributed to higher input costs for materials such as drywall, lumber and steel, as well as labour. "In a busy market, sometimes your sub-tradespeople can push up their prices or ask for more. The builder has to shoulder those costs," he said in an interview from Ottawa yesterday.
Dianne Himbeault, senior market analyst at CMHC, said a number of factors have contributed to the ongoing construction boom, including high consumer confidence, low mortgage rates and international immigration to the province.
Best year since 1980s?
She said she's confident with new starts already ahead of last year's pace, 2004 will end up as the best year for housing construction since the late 1980s and the sixth consecutive year in which housing construction has increased in the province.
"The builders are working to capacity as far as we can tell. But just when you think they've reached capacity, they have a month where they outdo themselves," she said in an interview.
After a slow start, multiple-family projects have finally started to register this year as foundations were laid for 112 units in July, Himbeault added, the majority of which are in one apartment building in St. James. As a result of the July surge, there have been 203 multiple-family units started thus far this year, 45 per cent ahead of last year's pace. But Himbeault noted the industry would be hard-pressed this year to top the performance in the latter part of 2003 in Winnipeg, when work began on more than 640 multiple-family units.
Garth Steek, who yesterday began his post-city hall career as president of the Manitoba Home Builders Association, said he doesn't see any signs of the industry slowing down any time soon.
"People perceive housing in Winnipeg as still being an exceedingly good value. They know because of the escalation in the prices of used housing, they can take a significant amount of equity out of their (current) home and invest in new housing," the former city councillor and mayoral candidate said in an interview yesterday.
The housing boom extends all the way to Brandon. While single-family starts were down 38 per cent in July (eight versus 13) and 10 per cent for the January-to-July period (56 versus 62), the 121 multiple-family starts already underway have pushed total starts well ahead of last year's pace for the first seven months of the year.
There have been 177 single and multi-family starts in Brandon thus far this year, up from just 78 a year ago.
Nationally, housing prices rose 6.2 per cent over the past year, their fastest pace since February 1990 when prices increased 7.1 per cent. Prices across the country moved up 0.7 per cent from May to June, Statistics Canada reported.