Winnipeg Free Press
Friday December 10 2004
By Murray McNeill
WINNIPEG had the biggest increase in new-home prices in the country in October, according to new Statistics Canada figures released yesterday.
The federal agency said the cost of a new home increased by 8.5 per cent in Winnipeg between October of last year and October of this year.
Rounding out the top five gainers among the 21 urban centres surveyed were St. Catherines-Niagara (up 7.9 per cent), Victoria and Ottawa-Gatineau (up 7.3 per cent) and Regina (up 7.2 per cent).
However, on a month-to-month basis, Winnipeg homebuyers fared a little better. The Manitoba capital was one of six cities to post no increase in new-home prices from September to October, with the others being St. John's, Halifax, Windsor, Saskatoon, Greater Sudbury and Thunder Bay.
The Statistics Canada figures show October was also the fifth consecutive month where the average selling price of a new home in Winnipeg increased by 8.5 per cent on a year-over-year basis.
The agency said favourable market conditions and healthy demand combined to keep new-home prices strong in Winnipeg and most other Canadian cities in October. It said the year-over-year average increase in Canada was 5.6 per cent, while the September-to-October increase was 0.2 per cent. Higher prices for labour and building materials, such as lumber and drywall, also helped to push up prices, the agency added.
However, the biggest factor by far for the dramatic spike in new-home prices this year in Winnipeg is the dwindling supply of serviced building lots, according to Garth Steek, president of the Manitoba Home Builders Association.
Steek said a 50-foot lot that cost about $50,000 at the start of the year is now selling for about $65,000.
"That's understandable," Steek added. "It a supply-and-demand issue."
He said there is a shortage of serviced lots throughout the city, particularly in the southwest quadrant. Thanks to a strong local economy, low interest rates, and good employment levels, there's also a continued strong demand for new homes. Those factors together drive up prices.
Given current trends, Steek said there's also no reason to think things will change much in the new year.
murray.mcneill@freepress.mb.ca