Ashley Ford
Province
Surging B.C. housing starts continue poking sticks in the eyes of economists warning of a cooling market. Canada Mortgage and Housing Corp. said yesterday urban housing starts roared ahead last month in B.C by 47 per cent and in Greater Vancouver by 64 per cent.
And, to make sure the industry doesn’t really tumble out of bed, CMHC has introduced a pilot program that will offer 30-year mortgages, up five years from the traditional 25-year amortization period.
“The availability of extended amortization periods will improve access to home ownership for Canadians by lowering monthly principal and interest costs,” said Karen Kinsley, CMHC president.
The pilot program will run to the end of June and then be determined whether it be made permanent.
Last month’s starts caught many observers by surprise and, despite the performance, many continue to warn the housing market is poised for a rest.
But not in Vancouver or B.C, where starts climbed to 1,988 units and 2,877 units, respectively.
“Demand for new housing remains strong. The inventory of newly completed and unoccupied units has fallen 30 per cent from a year ago,” Cameron Muir, senior CMHC analyst in Vancouver, said.
He said the condominium market is tight with only 90 newly and unoccupied units available.
Muir sees a strong future and says a combination of rising wages, low unemployment and strong consumer confidence is driving new housing demand.
Across Canada, housing starts slipped 2.9 per cent to 240,900 on an annualized basis last month from January’s 248,100.
But industry observers had been expecting starts to drop to 231,000, BMO Nesbitt Burns chief economist Sherry Cooper said.
“After an incredibly warm January, February’s chillier temperatures only managed to cool housing activity modestly,” she said.
Scotia Economics analyst Sarah Hughes also pointed out that despite the month-over-month slippage, starts for the first two months of 2006 were 16 per cent above the same period last year.
However, TD Bank economist Sebastien Lavoie noted that strong national numbers mask a wide divergence in regional performance.
Ontario, Quebec and the Atlantic region saw starts fall by 15, nine and 18 per cent respectively from January.
© The Vancouver Province 2006
