By Lanny McInnes
The Canada Mortgage and Housing Corporation (CMHC) recently released housing-start statistics for the first six months of 2018. As expected, the number of housing starts year to date has decreased compared to this time last year.
Certainly, the race to build new homes, both single and multi-family, prior to the implementation of the City of Winnipeg’s new impact fee was a driver behind the almost-record number of housing starts in 2017.
Other factors such as strong economic conditions, increased immigration, the expansion of the mortgage stress test and rising interest rates also encouraged housing start growth last year.
The first half of 2018 has come as predicted with housing starts returning back to what is generally considered more normal levels. Total housing starts in the Winnipeg metro area were down 32 per cent from a year earlier during the first half of 2018.
According to the CHMC, the decline was most pronounced on multi-family housing, where production through June 2018 declined by 38 per cent from the same period of 2017.
While year to date, the number of housing starts is lower for the city of Winnipeg and the surrounding area, the decrease was lower in the surrounding municipalities.
In fact, housing starts in the municipalities surrounding Winnipeg this June actually doubled compared to June 2017, when we were in the midst of an almost-record construction season.
As well, the percentage of all-new home construction taking place just outside of Winnipeg has increased this year. In June 2017, six per cent of all the homes built in the Winnipeg metro area were built outside of Winnipeg’s city limits. This June, that percentage has increased to 14 per cent. This would indicate that more new homebuyers are seeing building just outside of Winnipeg, rather than inside the city limits, as attractive this summer.
While some communities such as Steinbach and Winkler have also seen 2018 housing starts at a slower pace compared to last year, other Manitoba communities have seen increases in housing starts. Total housing starts in Brandon year to date were 33 per cent higher than during the first six months of 2017, with multi-family starts increasing by 31 per cent. The RM of St. Andrews has seen noticeable housing-start growth during the first half of 2018 and Portage la Prairie has maintained its level of housing starts the same as last year.
With Manitoba’s residential construction season now in full swing, it will be very interesting to see if some of the market trends we are beginning to see in and around Winnipeg over the first six months of 2018 will continue throughout the summer months and into the fall.