Derrick Penner
Sun
Greater Vancouver recorded 2,009 housing starts in October, a 75-per-cent jump over the same month last year and the highest number of starts for an October in 25 years, Canada Mortgage and Housing Corp. reported Tuesday.
Multiple-unit starts — apartments and townhouses — were the sole reason for the gain, said Cam-eron Muir, CM-HC’s housing market analyst for the Lower Mainland. Multiple-unit starts acc-ounted for three out of every four homes being built in the region.
There were 1,573 multiple units started in October, a 121-per-cent increase from the same month a year ago. Single-family home starts, however, slipped by a percentage point to 436 units.
For the year-to-date, Muir said housing starts hit 15,942 at the end of October, down three per cent from 2004. The CMHC is forecasting the region will see 18,000 new starts for all of 2005, seven per cent below starts in 2004.
The 2005 decline up to October was all in single-detached starts, which fell 14 per cent to 4,147 units compared with a year ago. Multi-family starts increased 2.5 per cent to hit 11,795 compared with the first 10 months of 2004.
“We’re seeing single-detached starts wane, and that’s the result of probably two issues,” Muir said. “One is on the price side. On the other side, more importantly, is the availability of land.”
The large tracts of land needed for single-family homes aren’t available, Muir said, adding more of the land left for development is zoned for multi-family.
He said planning pressure to create “complete, livable communities” is one of the factors driving the push toward higher densities of multi-family housing.
Muir said affordability is becoming an issue for some buyers, mainly due to the rapidly rising housing prices in the Lower Mainland. He predicted that by the end of the year, housing prices will have risen by about 14 per cent during 2005.
Multi-family units, he added, give buyers housing options they can afford.
Muir is quick to add that when he adjusts to account for inflation, new-home prices today are just catching up to prices people were paying in 1995, “and mortgage rates are half what they were then.”
However, Peter Simpson, CEO of the Greater Vancouver Home Builder’s Association, said he believes affordability is a bigger factor behind the shift to multi-family construction.
Simpson said that five to 10 years ago, almost all first-time home buyers “aspired to own a single-family home. That has changed.”
CMHC is forecasting that 2006 housing starts in the region will dip three per cent to 17,500 units.
