New-homes market soars

February 9, 2010
Winnipeg Free Press
Written by: Murray McNeill

Surge in multi-family starts credited

A shortage of listings sucked the wind out of the resale-homes market in January, while the new-homes market was steaming to a 94 per cent increase in starts, according to new figures issued Monday.

For the first time in six years, fewer than 500 properties—487—sold during a single month through the WinnipegREALTORS (WR) Multiple Listing Service, the association said.

The main reason for that was a shortage of listings in a number of areas of the city, including parts of East and North Kildonan, St. James and St. Vital, according to the association's residential market analyst, Peter Squire.

The new-homes market saw foundations poured on 248 new residential units during the month, which was a 93.8 per cent increase over January 2009, Canada Mortgage and Housing Corp. said.

The reason for the big increase was a surge in multi-family starts to 132 units.

"Typically, multi-family starts take a break during the winter months, so to see more than 100 units started in January is unusual," said Jeff Powell, the agency's senior market analyst for Manitoba. Powell noted the 10-year average for January is less than 42 multi-family starts.

It was a different story with single-family starts, with 116 begun -- six fewer than in January 2009. But there were reasons for optimism, according to Manitoba Home Builders Association president Mike Moore.

Moore said January 2009's single-family starts were based almost entirely on sales from the first half of 2008, before the global recession started to take hold. By January of last year, most prospective buyers had already fled the market.

But by January of this year, many had returned, Moore said.

"We had excellent sales periods from the Fall Parade of Homes on, and those are the starts we're seeing now. So we're seeing positive starts numbers based on positive sales numbers."

Squire and WR president Claude Davis expect the shortage of listings in resale homes to ease by spring.
"I think over the longer term, we're going to be looking at a fairly strong market this year," Davis said.

He said January's weaker sales also could be due in part to the record number of MLS sales in December. He said some buyers may have bought sooner than planned because they thought there would be fewer buyers in December and therefore less competition for homes.

Despite the seven per cent decline in units sales, the WR still set a new record last month for the highest dollar volume of sales in a December, at $102.1 million.

That was due in part to a million-dollar-plus sale, and to the fact 35 per cent of homes that sold went for more than the list price. That's more than double the number in January 2008, although still well below the 50-per-cent plus that sold for above list during the spring of 2007.

The high percentage of above-list sales boosted the average selling price for January to $223,000 from $219,000 in December.

Nationally, Canadian real estate sales and prices are poised to set records this year, according to a new forecast that is bound to reignite calls in some quarters for tighter lending rules.

murray.mcneill@freepress.mb.ca

-- With files from Canwest News Service

January numbers

HERE'S how the local housing market performed in January:

Resale homes:

• Unit sales were down seven per cent from a year earlier -- 487 vs. 524 -- but the dollar volume jumped by six per cent to a new January record of $102.1 million.
• 35 per cent of homes sold for more than the list price.
• The average selling price for a detached home was 17 per cent higher than in January 2009, at $223,000.
  "ö Homes sold an average of 10 days faster.

New homes:

• Starts soared by 93.8 per cent to 248 units from 128 a year earlier.
• All of the gains were on the multi-family side -- 132 units vs. six in January 2009.
• There were six fewer single-family starts -- 116 vs. 122.

-- Sources: Canada Mortgage and Housing Corp. and WinnipegREALTORS

Republished from the Winnipeg Free Press print edition February 9, 2010 B7