Winnipeg Free Press
Wednesday May 5 2004
By Murray McNeill
MANITOBA'S string of three consecutive years of increased housing starts will come to an end this year, Canada Mortgage and Housing Corporation predicts in its latest quarterly housing forecast.
The federal Crown corporation said in its first-quarter housing forecast released yesterday that Manitoba is expected to record about 4,000 single and multi-family housing starts in 2004.
While that would be 500 starts better than what the agency was forecasting back in November, in its last quarterly forecast, it would still fall 208 short of 2003's combined total of 4,208.
Dianne Himbeault, the agency's senior market analyst for Manitoba, said in an interview yesterday the biggest decline is expected to be in the multi-family segment of the new-home market. CMHC is forecasting about 850 multi-family starts for this year, which would be 191 fewer than in 2003.
Himbeault noted last year's multiples total was bolstered by a seven-building, 364-unit apartment project built in Winnipeg's north end.
"But we might not see another big project (this year) like we saw last year," she added. On the single-family side, the picture is looking a little rosier. Although the agency predicted in November that single-family starts would fall by 216 units to about 2,800 in 2004, it is now revising that number upward to about 3,000.
Himbeault noted the demand for single-family homes hasn't shown any signs of weakening so far this year and likely won't until later in the year when the pent-up demand for new homes finally starts to wane.
A pending shortage of available serviced lots in the southwest area of Winnipeg also could put a damper on single-family starts later in the year, she added.
Manitoba Home Builders Association president Wayne Bollman agreed with Himbeault on that point.
"All the available lots (in the southwest quadrant) have virtually been spoken for," Bollman said in an interview. "Even now, people looking to get into that area have very little choice (in lots)."
Bollman and Himbeault also agreed rising interest rates aren't likely to have an impact on the demand for new homes this year. Himbeault said although rates may climb by a quarter of a percentage point before the end of the year, that won't be a big enough increase to deter prospective homebuyers.
"It will probably be 2005 before that (rising interest rates) becomes a factor," she added.
One area where she and Bollman disagreed was on whether the demand for homes is likely to weaken in the last half of this year.
"I still think we've got enough pent-up demand to keep us going through 2004," Bollman said, noting single-family starts were running more than 25 per cent ahead of last year after the first three months of 2004, and last year was the best year in 15 years for housing starts in the province.
Nationally, CMHC predicts housing starts will remain strong in 2004, hitting 208,500 units. That would be down slightly from 2003 levels, but would still be the second-highest yearly total since 1989, the agency added.
murray.mcneill@freepress.mb.ca