The cold weather and the uncertain economic environment are to blame for a decrease in new home construction during January in Winnipeg and the surrounding municipalities, according to Canada Mortgage and Housing Corporation.
CMHC reported home builders were unable to begin projects in January due to cold temperatures.
“January’s reduction in single-detached starts is in line with our expectation that the uncertain economic environment will result in reduced volumes during the first half of 2009,” said CMHC senior market analyst Jeff Powell.
Despite the reduction, the number of single-detached starts remained in line with the five-year average for January of 116 units. Actually, there were 122 single-detached starts, which was down 12 per cent from the 139 units started in January 2008.
Meanwhile, multi-family starts, which include semi-detached units, rows and apartments, comprised just six units in January this year, compared to 97 units during the same month last year.
“While a decline in activity was expected, multi-family starts are notoriously volatile,” said Powell, “and care should be taken in interpreting one-month of multi-family construction data.”
CMHC expects builders to concentrate their resources on completing multi-family units already underway rather than starting on large volumes of new units.
Another factor contributing to
decreased new home construction in January was the availability of resale homes.
“To a certain extent, the decline in housing starts (across Canada) coincides with recent developments in the existing home market,” said CMHC chief economist Bob Dugan. “Reduced sales and increased listings in the existing home market have led to reduced spillover demand in the new home market.”
New listings entered on MLS® in January were up 13 per cent from the same month last year. Active MLS® listings are up 50 per cent over the same period in 2008.
Meanwhile, WinnipegREALTORS® reported January MLS® unit sales of 524 which established a dollar volume record for the month of $96.5 million, a one per cent gain over January 2008.
“WinnipegREALTORS® has now had two solid months of MLS® activity and has reason to be optimistic given how well Manitoba’s economy is performing relative to the rest of the country,” said association president Deborah Goodfellow. “Winnipeg remains a very affordable and stable housing market with more choice and listings available than in a number of years,” she added.
Nationally, CMHC reported an overall 35.8 per cent decrease in housing starts — rural and urban — in January compared to the same month last year. Urban starts in Canada declined an estimated 40.4 per cent, according to the national housing agency.