Housing starts across the prairies are expected to dip this year before resurging in 2012.

According to a Canada Mortgage and Housing Corporation (CMHC) report released Wednesday, housing starts in 2011 are expected to start slowly and improve as the year progresses.

"Improved market balance with less competition from the resale market will result in a stronger second half, allowing production to reach 37,450 starts," CMHC's Regional Economist Lai Sing Louie said in a press release. "Prairie housing starts will rise to 40,400 units in 2012 propelled by increases in new home sales in Alberta, along with economic and demographic growth in the region."

CMHC's first quarter 2011 Housing Market Outlook, Prairies Highlights reported that in Manitoba, housing starts rebounded in 2010 with about a 41 per cent year-over-year gain from 2009.

As the province is expected to experience continued economic recovery in 2011 and 2012, coupled with increases in employment and earnings, this will maintain an increase in new house construction, the report said.

Demand for houses will also remain strong over the forecast period but it is expected to be dampened in 2011 by increased new home prices and more homes being listed on the resale market.

The CMHC expects single-detached housing starts in Manitoba of 3,650 in 2011 and 3,700 in 2012.

Meanwhile, multi-family housing production in Manitoba is expected to be 1,700 units in both 2011 and 2012.

House resales in Manitoba increased marginally in 2010 after two consecutive years of decline.

Sales are expected to climb modestly in 2011 and 2012. A rise in population is expected to lead to more demand as more buyers enter the house market ready to purchase either their first home or a move-up home.

However, the CMHC report said, sales growth will be impacted by rising home prices and a continued lack of adequate homes on the market, especially for entry level buyers.

Resale prices for houses in Manitoba posted another year of strong gains in 2010, increasing by approximately 10 per cent over 2009.

The CMHC expects the rising house prices to provide extra incentive to homeowners looking to move up to larger homes to list their current homes on the market, adding some much needed supply to the market where active listings have been low lately.

As for Portage la Prairie, housing starts in 2010 were up in the city over the previous year.

The city saw 69 single-detached homes started in 2010 compared to 59 in 2009 and 47 multiple-family homes started last year compared to just 15 in 2009.

In total, Portage had 116 housing starts last year compared to 74 for the previous year, a jump of 57 per cent.

According to statistics released by the CMHC, single family starts in cities and town across the province saw an increase in activity in 2010 with all Manitoba urban centres except Thompson recording more starts than in 2009.

Local developer Chris Bures, president of CHB Developments Inc., said he personally believes Portage will see at least the status quo for housing starts this year.

"I think it has been a little bit slow in the last few months but that just seems to happen at this time of year," he said Thursday. "I think that we'll still have a strong market. Obviously home prices here in Portage are lower than around us like in Winnipeg where they're much higher than they are here."

CHB Developments is currently building houses on the former Portage la Prairie School Division property near the School Division building, along with building houses in the city's north end, finishing up a townhouse project at First Street S.W. and Dufferin Avenue and will begin soon on Kelly K Subdivision Phase 2.

"It looks like we'll probably be starting (on Kelly K Phase 2) toward the mid-summer and the fall of this year," Bures said.

rswystun@cpheraldleader.com