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Metro Vancouver builders have returned to building condominiums in a big enough way to push up the region’s overall housing starts this year while the number of single-family homes is declining, according to new numbers from Canada Mortgage and Housing Corp.
The pace of new-home construction in June declined from an unexpected frenzy of starts in May, according to Robyn Adamache, a Canada Mortgage and Housing analyst in Vancouver. However, the 8,472 total housing starts recorded in Metro Vancouver at the end of June represented a 23-per-cent increase from the same period of 2010.
Of those starts, 6,813 were multi-family homes — condominiums and townhouses — which was a 51-per-cent increase from starts during the same period of 2010. On the other hand, the 1,659 single-family-home starts for the same period represented a 30-per-cent decline.
Adamache said the post-recession recovery in housing construction began a year ago in single-family home building, but this year’s increase in multi-family construction reflects the confidence developers have that the economic recovery is on more solid ground.
“Builders are feeling more confident to start those larger projects now on the multi-family side,” Adamache said Monday. “They’re feeling like it’s not just a short-term change in the economy and things are really settling down.”
Overall, Adamache added that the factors that drive new-home construction — immigration, an improving job market and continuing low mortgage rates — are still strong enough to support the construction underway.
Adamache said Metro Vancouver saw a spike in the pace of housing construction in May that skewed provincial results, but that was likely due to the nature of stronger multi-family construction.
“[Multi-family] construction is very volatile,” she said. “It makes it look like things are swinging a lot from month to month when it really could be the difference of one or two projects [starting in a given month] if they are very large.”
As of the end of June, Adamache said builders around Metro Vancouver were on pace to start work on 15,700 new housing units by the end of 2011, which is close to Canada Mortgage and Housing’s forecast of 16,000.
The biggest increases in multi-family construction have come in Richmond and Surrey with some of the activity pushed along by same influence of immigrant and offshore purchasing that is affecting the overall real estate market.
Richmond recorded 1,185 multi-family housing starts in the first half of 2011 versus 458 for the first half of 2010, and total starts of 1,315 in 2011 compared with 595 in 2010.
Across B.C., the province’s urban centres saw 11,405 new-home starts in the first half of 2011, which was fractionally lower than the 11,475 in the same period of 2010.
Nationwide, home construction rose more than expected in June, led by a jump in single-unit activity, according to Canada Mortgage and Housing.
Nationally, the seasonally adjusted annual rate of housing starts was 197,400 units last month, up 1.7 per cent from a revised 194,100 units in May, CMHC said. The April figure was also revised to 194,100 units.
Economists had expected between 184,000 and 185,000 starts in June.
“Housing starts increased in June due to an increase in single and multiple starts in Ontario,” said Bob Dugan, chief economist at CMHC’s Market Analysis Centre.
“The revised numbers show that housing starts have been above their trend line since March,” according to Bob Dugan, Canada Mortgage and Housing’s chief economist. “However, we expect housing starts to move back toward levels consistent with demographic fundamentals in the near term.”
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.