Metro Vancouver starts ease in balance with market report
VANCOUVER The pace of new-housing construction in Metro Vancouver eased off in May from that of previous months yet remains at a level in line with market conditions, Canada Mortgage and Housing Corp. reported Tuesday.
The national mortgage insurer counted 1,173 new homes across Metro Vancouver in May, a dramatic 150-per-cent improvement on the same month a year ago, which was still in the doldrums of B.C. housing downturn.
For the year to date at the end of May, builders have started work on 5,631 new homes, which is 103 per cent more than for the same period a year ago.
However, Robyn Adamache, Canada Mortgage and Housings senior analyst for Vancouver, said the annualized pace of construction, the estimate for the number of starts that will occur by the end of the year, had slowed some seven per cent compared with April.
Adamache said builders are likely taking their cue from the housing resale market where sales, while still brisk, have eased off their torrid pace of late 2009 and price gains have slowed.
Its the resale market that sets the tone for whats happening in new housing, Adamache said. I think builders are looking at that and will be adjusting accordingly.
Construction of single-family homes has been particularly strong, Adamache said, with the 424 starts in May a 102-per-cent increase from May 2009. Surrey alone accounted for 180 of those single-family starts.
And in Surrey, single-family starts topped multi-family (townhouse and condominium) housing starts both in May, when there were 74 multi-family starts, and for the year-to-date with 921 single-family homes versus 569 multi-family housing starts.
In Vancouver, by contrast, single-family starts are up dramatically, but the 78 homes builders started work on last month and the 261 begun by May 31 were still overshadowed by the 324 multi-family starts in May and 1,306 started as of May 31.
Adamache said the strength of single-family starts, which are higher than their 10-year average for this time of year, was not a surprise given the dynamics of the recent housing downturn.
She added that single-family housing starts slowed the least when builders scaled back construction plans and were the first to come back because single-family construction projects are the easiest to stop or start.
The multiple-unit sector remains below their 10-year average, although market indicators still suggest that the new-home construction market is in balanced conditions, Adamache added.
Vancouver saw the highest number of multi-family starts in May with 324 compared with only 20 in the same month a year ago. For the year-to-date at May 31, Vancouver recorded 1,306 multi-family starts and 1,567 total housing starts.
Peter Simpson, CEO of the Greater Vancouver Home Builders Association, said his members are cautiously optimistic about the future and are launching new projects while keeping one eye on whats happening around them.
They are concerned about where interest rates are going, thats kind of very much up in the air, Simpson said. They’re concerned about the HST [harmonized sales tax] impact.
However, the builders he’s talked to are confident about the projects they are launching and sales they are making.
Deborah Calahan, vice-president of sales and marketing for Morningstar Homes, said the company has seen solid sales at its developments, including North Delta and Abbotsford, and we don’t see that changing.
The market is cyclical, you get your ups, you get your downs, Calahan said. We address the market at whatever point it is at, and always do it in a very positive way.
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