Starts in urban areas of the province reached 12,000 last month, compared to 9,600 in May
Fiona Anderson
Sun
Housing starts in British Columbia jumped 25 per cent in June after reaching near record lows in May, a sign the worst may be over.
The seasonally adjusted annual rate of starts in urban areas in the province — which adjusts actual building starts in the month for seasonal variations, then multiplies by 12 — reached 12,000 in June, compared to 9,600 in May, according to numbers released Thursday by Canada Mortgage and Housing Corporation (CMHC). But the actual number of starts — 1,062 — was still well below last June’s near-record high of 2,635.
The jump came from multiple starts, which when annualized amounted to 7,300 in June, up from 4,900 in May. Single-dwelling starts remained unchanged at 4,700.
June’s numbers were in line with CMHC’s forecast that home construction would pick up in the second part of the year, said Carol Frketich, CMHC’s regional economist.
“But it’s not going to be a strong pickup,” Frketich said.
Recent strong housing resale numbers — with last month being the second-busiest June on record in Metro Vancouver — bode well for future construction.
“New listings peaked last year and it has come down, and that was one of the adjustments we needed to take place in the resale market before we could see a pickup in home construction,” Frketich said.
“It’s still early days but it’s movement in the right direction,” she said.
Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association, said his members have seen increased activity.
Increased sales are depleting inventories and builders are starting to contemplate new projects, Simpson said.
“And some builders have launched new projects to great success,” Simpson said. “They’re getting buyers and they are starting construction on their new offerings.”
These are experienced builders, Simpson said, who have been through many business cycles.
“So I think by launching new projects they’ve shown a lot of confidence in the market and in the future,” Simpson said.
While numbers are still well below last year’s, “last year was the second-best year since 1993, so the comparison this year is always going to be deficient,” he said.
BMO Capital Markets economist Robert Kavcic also believes the worst may be over.
“We probably saw the worst of it in [the first quarter],” Kavcic said in an interview. “But I don’t think we are going to see a super-strong rebound because there was quite a bit of overbuilding in the four or five years going into the recession.”
Construction in Nanaimo has survived the downturn almost unscathed, with housing starts down only five per cent from a year ago, CMHC’s Frketich said. Nanaimo was one of the few centres last year where starts were up from the previous year.
“So that’s one area where construction continues to do well,” Frketich said.
Across Canada, the seasonally adjusted annual rate of housing starts increased eight per cent to 140,700 units during the month, up from 130,300 units in May, the country’s first back-to back monthly gain since February 2008. The Prairie provinces experienced the biggest jump, up almost 60 per cent. But starts are still down 34 per cent compared to June 2008, and 48.5 per cent below the peak in September 2007.
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