Read about it...
Back
Single-family new home construction remains strong
Aug 14, 2008

New home construction continues to be a “pillar of strength” in Winnipeg and the surrounding municipalities, according to Canada Mortgage and Housing Corporation.

In July, construction began on 173 single-family detached homes, a two per cent increase over the same month in 2007.

More than 32 per cent of the July home starts were outside the city, compared to less than 25 per cent during the same month in 2007.

“There are a variety of reasons someone might consider looking outside the city to build a new home,” said CMHC’s senior market analyst, Jeff Powell. “Larger lot sizes, a different tax structure and a more relaxed lifestyle may all factor into the decision.”

Up to the end of July, 1,102 homes were under construction, which represented a five per cent increase over the first seven months last year.

Meanwhile, CMHC reported that a decline in multiple-family starts has contributed to an overall drop in construction of all housing types. Total housing starts declined by eight per cent from July 2007 and 10 per cent for the first seven months of 2007.

Only 78 multiple-family housing starts were reported in July, which was down 24 per cent from the same month last year. On a year-to-date basis, 649 multiple-family starts were recorded, a drop of 28 per cent from 2007.

“Given both the small size of the market and the monthly variation in the data, the addition of one or two large projects in the latter part of the year can have a dramatic effect on the yearly totals,” explained Powell.

Nationally. the seasonally-adjusted annual rate of housing starts was 186,500 units in July, down from 215,900 units in June, a 13.6 per cent decline, according to CMHC.

“After a strong first half of the year, the volatile multiple segment is now readjusting itself,” said Brent Weimer, senior economist at CMHC’s Market Analysis Centre. “This brings activity since the start of the year closer in line with our 2008 forecast of more than 200,000 housing starts for the seventh consecutive year.”

The seasonally adjusted annual rate of urban starts decreased by 14.8 per cent in July compared to June. Both urban multiples and singles moved down, with a drop of 20.2 per cent for multiples to 91,600 units, and a 6.6 per cent decline for singles to 69,800 units. 

“Canadian residential construction activity has held steady since 2003 thanks to strong multiple-unit starts,” said Dr. Sherry Cooper, chief economist for BMO Capital Markets in a press release. “However, falling sales, tighter lending standards, slowing economic activity and declining confidence all point to downward pressure in the coming months, although not to the extent that we’ve seen south of the border.”

Statistics Canada reported the contractors’ price for a new home in Winnipeg rose 11.5 per cent over June 2007, citing the reason as “likely from higher material costs and continuing strong demand for new housing.”

Nationally, the contractors’ selling price rose 3.5 per cent between June 2007 and June 2008, the slowest pace in six years for the 12-month period ending in June.