The March 25 provincial budget contained measures to help Manitoba continue to weather any fallout from deteriorating economic conditions across the country and globally. It seems the way we “weather” tough times is comparable to weathering the physical conditions outside. President Obama has declared North Dakota a disaster zone and also Manitoba is bracing itself for serious flood issues over the next few weeks.
We can thank 1992 WinnipegREALTORS® Citizens Hall of Fame inductee Duff Roblin for getting the Red River floodway built and mitigating potential damage.
Amid mounting national job losses and stories that paint rather bleak prospects for Canada’s economy, Manitoba is bucking the trend — at least in the short term. The job stats for February show a stark difference between national numbers and those of Manitoba. Most provinces lost jobs in February, sending Canada’s unemployment rate to a six-year high of 7.7 per cent. Meanwhile, Manitoba defied all odds by actually seeing its workforce increase, albeit modestly.
Interestingly enough, despite job gains locally, Manitoba’s unemployment rate went up slightly to 4.8 per cent (second lowest only to Saskatchewan at 4.7 per cent), resulting from a number of expatriates returning from Ontario and Alberta to seek work in their home province.
It was reported Manitoba’s workforce grew by 1,900 in February and has grown by 10,000 since February 2008.
Looking ahead, construction activity remains positive with a number of major projects underway or planned, but manufacturing and financial services are starting to feel the pinch.
Manpower Inc., a private job placement firm, indicates in a recent survey they conducted that 17 per cent of employers plan to hire in the second quarter, while 78 per cent of Winnipeg employers plan to maintain their present staffing levels. Only five per cent are intending a cutback in their staff.
WinnipegREALTORS® president Deb Goodfellow has plenty of company in being an optimist. She sees Manitoba with its glass half full; even if our market is down from the two best years on record in 2008 and 2007, it is still faring much better than other Canadian markets. At the midway point of March, despite winter stubbornly entrenched, MLS®sales compared to March 2008 were only off by 12 per cent and dollar volume just off by six per cent.
There is now a healthy supply of listings creating balanced market conditions. MLS® home prices are remaining firm which is also the case for new homes. Statistics Canada said February new home prices held steady in Winnipeg despite falling in other Western Canadian cities. Manitoba Home Builders’ Association president Mike Moore confirmed this stat, indicating Winnipeg is not experiencing the downturn of other major centres. He said this spring’s parade of homes is getting excellent traffic, not only from tire kickers but quality buyers genuinely interested in the new home market.
“I believe Manitobans are beginning to realize things are going relatively well here and why would they not want to take advantage of exceptionally low mortgage rates if they know their job situation remains secure,” said Moore.
Backing up Goodfellow’s and Moore’s optimism is Probe Research’s Manitoba Business Leader Index conducted from January 28 to February 19 . It indicated 73 per cent of 200 business leaders feel Manitoba is in good shape when compared to other provinces. Our stable business environment and diversified economy certainly contribute to business leaders remaining optimistic about Manitoba’s prospects.
Even the local car dealers are seeing some positive signs with sales up in January over December. They believe the auto manufacturers are offering some very attractive packages for consumers and Manitobans are beginning to respond to these offers. Used car sales in particular are doing well.
Helping buttress Deb Goodfellow’s optimism is a recent outlook report by the Conference Board of Canada. It is calling for Manitoba’s economy to grow by one per cent and a significant recovery to over three per cent growth in 2010. It cites major public-sector projects, a strong agricultural sector and resilient manufacturing as helping Manitoba buck the national trend of negative growth.
Goodfellow also takes some delight in Probe Research’s survey on behalf of Destination Winnipeg which shows a third of Canadians would consider moving to this province if a good job opportunity presents itself and/or quality of life factors such as affordable housing are available. The 18 to 34 age group were more positive than higher aged demographics which is encouraging given Manitoba’s concern about keeping and attracting a younger workforce. The survey indicated that a greater percentage of Canadians are perceiving Winnipeg in a positive light.
Another positive for our local economy and for real estate is the excellent fiscal condition of Manitoba’s credit unions. They reported an 11.9 per cent increase in assets to $14.4 billion in 2008, marking the ninth consecutive year of double digit growth. This year the credit unions have the liquidity to continue to meet lending demand.
There is also some good news on the affordability front. WinnipegREALTORS® just received a letter from the Frontier Centre for Public Policy saying Winnipeg is one of 10 cities found to have the most affordable housing in the country. The Fifth Annual Demographia International Affordability Survey indicated “to achieve a demographia rating of ‘affordable,’ housing overall must not exceed three times the annual household income.” The conclusion is Winnipeg has retained its housing affordability.
Not surprisingly, a 2009 RE/MAX First Time Buyer’s Report confirmed the Frontier Centre’s findings in terms of first-time home buyers. The average price for a single detached house is $185,000 — less expensive than Regina at $210,000 and Saskatoon at $190,000 — and the least expensive in Western Canada.
If you doubt some of the sincerity behind the above local opinions and sense of optimism, consider a March 22 article by Canadian Press reporter Chinta Puxley, entitled: Recession? What recession? Manitoba Seeing Steady Growth, Jobs, Retail Sales. The article reported Manitoba “seems to be bucking the recession with its ‘steady-as-she-goes’ incremental growth.” According to the article, our unemployment rate is three percentage points below the national average, retail has only dropped half a percentage point compared to more than five across the country. Among the “good” news stressed was IKEA’s impending arrival .
The article indicated one-third of Winnipeg’s homes are still selling at or above asking price.
A house in Transcona attracted six offers and sold for $188,500, which was $8,600 above list price. Another listing earlier this year in St. Vital received seven offers and sold for $342,900, which was $13,000 above list price.
The article goes on to state the Conference Board refers to Manitoba as an “even keel” economy and the “momentum generated in the last few years will carry it forward into 2010.” There is also mention of the fact that Manitoba has seen an influx of people to the province who help maintain the steady demand for housing.
Jeff Powell, senior market analyst for CMHC, said Manitoba never saw the speculative buying experienced in other provinces, protecting the province from the sales and price drops in other cities.
To end on an optimistic note, the place where the economic malaise originated had some good news. New U.S. housing starts in February were up 4.7 per cent. As reported by the Washington-based National Association of REALTORS®, existing home sales in February were up 5.1 per cent over January 2009, the largest monthly sales jump since July 2003. The association said first-time buyers were the most significant factor for the increase.