Drop follows a month of unusually high residential building activity in February
Sun
B.C. urban housing starts dropped by 37.1 per cent for March, further emphasizing that February had been a month of unusually high activity, Canada Mortgage and Housing Corp. reported Tuesday.
In February, 47,400 urban starts were reported in B.C. — 2,446 in Metro Vancouver alone, about 96 per cent more than the 1,248 units in February 2007.
But B.C. urban starts dropped to 29,800 last month, part of a nationwide cooling that saw residential construction slipping to 254,700 units from 255,600 in February. Still, that strong February helped Metro Vancouver’s home builders start 2008 with the strongest first quarter since 1990, preliminary figures from CMHC show.
Starts of all home types in Metro Vancouver increased by 19 per cent over the first quarter of last year, led by multiple-unit starts, up by nearly 25 per cent.
But Peter Simpson, chief executive officer of the Greater Vancouver Home Builders’ Association, cautioned that a strong start doesn’t guarantee that pace will continue throughout the year.
“Housing starts reflect yesterday’s sales, and sales have moderated in recent months, so although a strong first quarter is encouraging, there is no guarantee the strength in starts can be sustained for the next nine months,” Simpson said by e-mail. “However, if the current pace continues to the end of the year, 2008 will end up the best year for starts since 1993.”
He added that, judging by the more than 700 people who had signed up for an association seminar for first-time home buyers Tuesday night, “there is still a strong interest in homeownership, despite the affordability challenges so prevalent in the Vancouver-area market.
“Multi-family starts continue to outpace single-family starts by a wide margin. First-time home buyers have lowered their expectations, realizing their first home will likely be a townhome or apartment condominium. In fact, today’s generation of Vancouver-area home buyers might live their entire lives in some form of multi-family housing.”
While building activity slowed across the country in March, it was still stronger than most analysts had expected, given recent indications that Canada‘s hot market is beginning to retrench to more realistic levels. Forecasts ranged from 218,000 to 222,500 new units in March.
“The high level of starts posted in February continued in March, thanks to the multiple segment and particularly condominium starts, which registered a significant rise in Alberta,” said Bob Dugan, chief economist at CMHC’s Market Analysis Centre. “Nevertheless, the single-detached component, which is usually a strong trend indicator, decreased slightly. This is consistent with our view that the housing market will moderate gradually throughout 2008.”
The seasonally adjusted annual rate of urban starts declined in three of Canada‘s five regions in March, CMHC said.
