B.C. posts largest increase in Canada
Paul Luke
Province
Housing starts in B.C. were up 45 per cent over January 2008 in seasonally adjusted figures, the largest increase in Canada. Ric Ernst file photo – The Province
B.C. posted Canada‘s largest increase in urban housing starts last month as hunger for condos in the Lower Mainland lit a fire under the homebuilding sector.
B.C. posted an increase of 45.2 per cent in housing starts between January and February, Canada Mortgage and Housing Corp. said yesterday.
Urban starts across the province rose to a seasonally adjusted level of 48,800 in February from 33,600 in January, CMHC said.
Actual starts in the Vancouver area surged to 2,446 in February, almost double the level notched in the same month a year ago, CMHC said.
Multi-family homes accounted for about 90 per cent of all housing starts in the area.
“With apartments and townhomes being relatively less expensive than single-detached houses, the demand for multiple family homes will remain high in 2008,” CMHC market analyst Richard Sam said.
“Developers are increasing the number of multiple family homes, especially apartment condominiums, being built in centres throughout Metro Vancouver.”
Single-detached-housing starts in the Lower Mainland fell nine per cent from last year, the second consecutive monthly decline.
Despite the surge in multi-family starts, overall units this year in the Vancouver area are expected to fall 10.8 per cent to 18,500 units from 20,736 last year, CMHC said.
Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association, said the shift from single- to multi-family starts has been under way in the Lower Mainland for about a decade.
The trend is being driven by affordability and land-use constraints, Simpson said.
“If you’re a first-time homebuyer, it’s a stretch to get into a single-family home, unless you get considerable help,” Simpson said.
“With all the geographic constraints we’ve got to work with, densification is the future.”
Some homebuilders who traditionally built single-family homes are diversifying into townhouse projects, he said.
Nationally, the homebuilding market continued to set itself apart from the battered U.S. market.
Canada‘s seasonally adjusted starts in rural and urban areas climbed to 256,900 in February from 222,700 units in January, CMHC said.
But observers say the current pace of construction can’t be sustained.
“The deterioration in affordability and growing economic uncertainty should gradually slow home building activity in the months ahead,” said Robert Hogue of BMO Capital Markets.
The shift towards more volatile multi-family construction is also likely to make housing starts more unstable, Hogue said.
© The Vancouver Province 2008
