Slow but steady growth forecast for Winnipeg’s housing market
The resale market is expected to chug along in the next few years even though home-building will slow down because there is more supply than demand. New projections were released Monday. Photo Store
Rising inventory will take some of the steam out of the local home-building market over the next few years, but healthy population and employment growth should keep the resale market chugging along, the fall forecast by Canada Mortgage and Housing Corp. shows.
“Total starts (in the Winnipeg Census Metropolitan Area) will continue to come down from the 2013 peak over the forecast period,” Lai Sing Louie, CMHC’s regional economist for the Prairie region, said Monday.
“Rising inventory in the multi-family sector will prompt builders to reduce production in 2016 and 2017, offsetting slight increases in single-detached construction.”
The agency predicts total starts in the Winnipeg CMA will drop by 7.6 per cent this year, falling to 3,925 units from 4,248 in 2014. And they will continue to drift down during the next two years, falling to 3,800 units in 2016 and to 3,750 units in 2017.
Manitoba Home Builders Association president Mike Moore agreed builders of multi-family complexes — condominiums, townhouses and rental apartments — will likely postpone some new projects next year until they can significantly reduce the inventory of unsold units.
“But I think the inventory will be pretty much gone by then (the end of 2016) and it will be time to start building again,” he added.
“So I’m a little more optimistic about (2017). I think the numbers will be slightly better than is forecast — by a couple of hundred units. ”
As for the single-family side, Moore said the industry would be satisfied to see starts continue to grow at a slow but steady pace during the next few years.
“That’s good news for the bulk of our builders who are single-detached builders.”
CMHC also expects the local resale market to continue chugging along during the next couple of years as population and employment continue to grow. But the growth in MLS sales will be modest — less than one per cent in 2016 and 2017, it said.
Balanced market conditions should keep price increases in check. The average MLS selling price is expected to climb by 1.7 per cent to $278,000 this year, and by 1.4 per cent in both 2016 and 2017.
Peter Squire, residential market analyst for the Winnipeg Realtors Association, said those prices are in line with industry expectations.
Although sales of detached homes are up a bit this year, condo sales are lagging, he said.
It will likely be a similar story in 2016.
“That (the inventory of unsold condos) will have to work its way through, and it will,” he said.
CMHC’s fall forecast also looks at what’s likely to happen in the Manitoba housing market, and it’s a similar story. Housing starts are expected to fall to 5,600 units this year from 6,220 in 2014, hold steady at that level in 2016, and rebound to 5,700 units in 2017.
Like Winnipeg, MLS sales will continue to climb at a moderate pace in the next two years, rising to 14,200 units in 2016 and to 14,400 units in 2017, the agency added. The average selling price will creep up, rising to $273,600 in 2016 and to $277,500 in 2017.
CMHC fall housing forecast
Here are the Canada Mortgage and Housing Corp.’s projected numbers for the Winnipeg and Manitoba housing markets, with the percentage change from the previous year in brackets:
|Housing starts||4,248||3,925 (-7.6)||3,800 (-3.2)||3,750 (-1.3)|
|MLS sales||12,147||12,300 (1.3)||12,400 (0.8)||12,500 (0.8)|
|Average selling price||$273,363||$278,000 (1.7)||$282,000 (1.4)||$286,000 (1.4)|
|Housing starts||6,220||5,600 (-1.0)||5,600 (0)||5,700 (1.8)|
|MLS sales||13,782||14,000 (1.6)||14,200 (1.4)||14,400 (1.4)|
|Average selling price||$266,329||$269,800 (1.3)||$273,600 (1.4)||$277,500 (1.4)|
* Census Metropolitan Area
Republished from the Winnipeg Free Press print edition October 27, 2015