Single-detached home construction is proceeding at a pace that hasn’t been equalled in two decades, according to two recent reports from Canada Mortgage and Housing Corporation.
The 1,656 homes started in the Winnipeg Census Metropolitan Area during the first 10 months of the year “represents the Strongest October year-to-date total for single-detached starts since 1990,” said Dianne Himbeault, CMHC’s senior market analyst based in Winnipeg.
According to CMHC, the good news for local home builders is expected to continue into next year.
“By the end of 2011, builders are expected to have started construction on 3,250 (single-detached and multiple-family) homes,” Himbeault added, “on par with the 3,244 started in 2010.
“Many factors that have supported demand for housing this past year will persist into 2012. Builders will therefore maintain production levels next year, starting 3,275 units for a gain of just over one per cent.”
Builders of single-detached homes are also expected to maintain 2010’s pace and end 2011 with 1,950 units. This represents a 1.5 per cent increase over last year’s final tally.
“Looking forward, demand for new homes will remain strong as existing homeowners continue to take advantage of equity gains and make their way to the move-up market,” said Himbeault.
The 1,975 new homes forecast for the end of the year would represent the best performance for single-detached starts since 1989.
In October alone, there were 178 new single-detached starts, which was a 19 per cent increase over the same month in 2010.
Meanwhile, multiple-family starts, which consists of semi-detached units, rows and apartments, are on track to match 2010’s performance and post 1,300 units in 2011, according to CMHC.
High levels of in-migration are contributing to demand, particularly within the rental market, where the vacancy rate was just 0.7 per cent as of April this year.
Due to the demand, CMHC is predicting multiple-family construction to hold steady in 2012 with another 1,300 units built.
In October, the multiple-family sector far exceeded last year’s meagre four starts for the same month, with 301 units breaking ground.
This upturn in activity brought the number of multiple-family units started year-to-date to 1,095, three per cent fewer than the 1,129 started a year earlier.
“Low vacancy rates in the rental market continue to spur new construction,” said Himbeault, “as more than two-thirds of the multiple-family starts were for this market.
“Year-to-date, rental starts are now running one per cent ahead of last year’s impressive numbers,” she added.