‘Robust activity’ to continue, CMHC analyst says
Brian Morton
Sun
SOURCE: CMHC PHOTO GETTY IMAGES • GRAPHIC VANCOUVER SUN
“Robust activity” to continue, CMHC analyst says Photograph by : Jeff Haynes/AFP/Getty Images
Greater Vancouver’s housing starts climbed 32 per cent to 2,168 units in July, the most yet recorded for the month, according to figures released Wednesday by Canada’s national housing agency.
“It surpasses any other July in the history of Vancouver,” said Cameron Muir, a senior market analyst for Canada Mortgage and Housing Corp., in an interview. “And that’s good news for buyers, because a lack of inventory pushes up prices.”
Single detached housing starts rose 17 per cent to 534 units, while multiple starts rose 38 per cent to 1,634 units compared to July 2005, the CMHC survey stated.
The previous record for July housing starts was 2,151 in 1996.
Year to date, housing starts in the Vancouver region increased 19 per cent to 12,129 units compared to the same period in 2005. Single detached starts climbed 28 per cent to 3,514 units, while multiple starts rose 15 per cent to 8,615 units compared to the first seven months of 2005.
The national survey also showed British Columbia leads the country in the seasonally adjusted annual rate of housing starts in July with a 21.9-per-cent jump in urban starts, followed by Ontario with an increase of 4.2 per cent. In the Atlantic region, the Prairie region, and Quebec, urban starts were down 2.2 per cent, 9.4 per cent and 10.5 per cent respectively.
Muir said the Vancouver numbers are only for one month, but that “a continuation of this robust activity will have an impact on the overall marketplace by having more choices for consumers. This mitigates the risk of a further erosion in affordability.”
Muir said he expects that starts will continue at a very strong pace for the balance of the year because of high demand and because inventories are still at fairly low levels. “There’s no danger of an oversupply happening right now. [But] I expect a levelling off of prices next year as the affordability peak is reached.”
Greater Vancouver Home Builders’ Association chief executive officer Peter Simpson said in an interview that the survey is another sign of Vancouver’s robust housing market.
Simpson called the CMHC numbers “surprisingly high,” adding that B.C.’s strong economy is a contributing factor. Another factor, he said, is that Vancouver is simply a nice place to live.
“I was speaking to some of my counterparts in the U.S. last week. I hosted them three years ago. They’re still talking about Vancouver, saying it’s a wonderful place to be.”
Simpson believes prices will still rise, at least for the foreseeable future.
“Demand still outstrips supply. And there’s not a whole lot of developable land. Land costs are going up and material prices are going up. [So] prices are going to go up.”
Simpson doesn’t believe the high rate of construction will lead to a housing glut. “Nobody’s building units that aren’t unsold right now.”
On Tuesday, Statistics Canada figures revealed that Vancouver is bucking the national trend in the value of residential building permits issued in June.
According to that survey, the value of all building permits across the country slipped marginally in June and would have been much sharper without a burst of industrial projects in Alberta.
However, the survey noted that the value of all construction — residential and non-residential — rose 17.8 per cent in Vancouver to $605 million, but was down 4.9 per cent for B.C. to $922 million.
Although the value of non-residential permits declined 26 per cent in B.C. to $281 million and 0.4 per cent in Vancouver to $172 million, the value of residential permits rose 8.8 per cent in the province as a whole to $641 million, and 27 per cent in Vancouver to $433 million.
For the year to date, the Statistics Canada survey said, the value of residential permits was up 16 per cent in Vancouver and 3.6 per cent in the non-residential sector.
© The Vancouver Sun 2006