B.C., Alberta to remain strongest national performers
Ashley Ford
Province
The bloom will fade slightly from B.C.’s vibrant home-construction market over the next two years, but the sector will continue to thrive by historical standards.
Canada Mortgage and Housing Corp. said in its latest housing outlook yesterday that B.C. will see starts shrink this year to 32,600 from last year’s 34,667. In 2007, they will dip a little more to 31,300.
In fact, the slight slowing will probably be welcomed by the hard-pressed construction industry which has been running flat out for the past four years and increasingly finding it difficult to find skilled trades.
While B.C. and Alberta will be the strongest-performing provinces next year others will see their home-construction numbers fall.
CMHC predicts nationally the industry will slow by 7.5 per cent this year and a further 6.5 per cent in 2007. The good news for consumers is that house-price increases, after hitting 10 per cent in 2005 — the biggest surge in 16 years — are forecast to moderate to 5.5 per cent this year and 3.8 per cent in 2007.
Total housing starts this year are expected to be 208,700 units, down from 225,481 last year, declining to 194,800 next year, ending five consecutive years above 200,000.
“Higher mortgage-carrying costs due to strong house-price growth and modest increases in mortgage rates will contribute to the slower pace of new-home construction,” said Bob Dugan, chief economist at CMHC.
Sales of existing homes, which hit a record 481,900 units in 2005, are expected to ease about four per cent to 461,500 this year.
© The Vancouver Province 2006
