B.C.'s urban housing starts soar
Construction reached 2,877 units last month, up 28.6% from January
Published: Thursday, March 09, 2006
Urban housing construction in B.C. soared last month, outpacing home-building activity in the rest of the country, the Canadian Mortgage and Housing Corp. reported Wednesday.
B.C. housing starts reached 2,877 units in February, up 28.6 per cent from 2,238 units in January. That jumped 46.5 per cent from 1,964 units in February 2005.
In Vancouver, housing starts climbed 64 per cent to 1,988 units, compared with the same month last year. That was the highest number ever recorded in Vancouver during the month of February.
Housing analysts attributed the surge in activity, in part, to the dry weather last month.
The construction of a few large projects can also heavily impact housing start figures in the Vancouver area, said Tsur Somerville, an associate professor at the University of British Columbia.
Somerville noted that at the same time Vancouver area housing starts are rising, sales are down, providing a mixed picture of the real estate market.
Last week, the Real Estate Board of Greater Vancouver reported that sales fell 4.1 per cent in February, compared with a year ago.
"There's a bit of uncertainty in the numbers to see what's going on," Somerville said.
CMHC regional economist Carol Frketich said strong employment growth and higher wages in B.C. have enabled more people to purchase homes.
"The strong demand conditions are still there," she said.
Canada, overall, saw housing starts fall slightly to 13,685 units last month, down from 13,269 units in January, according to CMHC.
In the first two months of the year, however, urban starts in the country were 17.7 per cent higher compared with the same period in 2005.
Although the national housing agency said the rate of housing starts remained "very strong," it forecast home building activity to slow down as mortgage rates creep higher.
The Bank of Canada on Tuesday raised its trendsetting rate by a quarter-point to 3.75 per cent, leading chartered banks to raise their prime lending rate to 5.5 per cent.
"The year started out very strong, but we'll see that moderate over the year," Frketich said.
But, she said, B.C.'s strong labour market and booming economy are expected to offset the effects of higher borrowing rates.
Housing starts in the province are expected to be on par with 2005, Frketich said. "In British Columbia, the housing outlook is strong and stable."
Single-detached starts in the province rose 29 per cent to 995 units in February, compared with a year ago. Multiple starts climbed 58 per cent to 1,882 units.
In Vancouver, single-detached starts rose to 512 units, up 42 per cent from February 2005. Multiple-starts in the city surged 74 per cent to 1,476 units.
CMHC said the number of newly completed and unoccupied units in B.C. has plunged 30 per cent from a year ago, indicating strong demand for newly built homes.
TD Bank Financial Group economist Sebastien Lavoie agreed that the rest of the country would see a sharper downtrend in home building activity than B.C. and Alberta.
But, he anticipated B.C.'s housing market would also experience a soft decline, due to higher borrowing rates, an erosion in affordability, and a shortage of builders.
RECORD BREAKER:
Housing starts climbed a blistering 64% in Vancouver in February compared to the same month last year, making it the highest number of starts ever recorded in February in Vancouver. Here's how the province's major centres fared in residential construction last month:
Single detached Multiples Total
Vancouver 512 +41.8% 1,476 +73.9% 1,988
Victoria 106 +47.2% 10 -82.1% 116
Abbotsford 37 +76.2% 16 +166.7% 53
Kelowna 61 -21.8% 209 +124.7% 270
Prince George 13 +18.2% 0 -- 13
Other centres 266 +17.7% 171 -10.5% 437
Urban B.C. 995 +29.4% 1,882 +57.5% 2,877
Source: Canada Mortgage and Housing Corp., Vancouver Sun
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