Vancouver's housing starts lead nation
Housing starts in the Vancouver area surged by a nation-leading 84 per cent between July and August as builders were emboldened by the recovering resale market.
Seasonally adjusted annual starts in the area soared from 5,600 in July to 10,300 last month, Canada Mortgage and Housing Corp. said yesterday.
CMHC senior market analyst Robyn Adamache said she expects the trend towards more starts to continue, if not with the same monthly magnitude.
"We've seen several very solid months of resale-market activity that sets the tone for any housing market," Adamache said. "That's making everybody feel a little more confident about starting that next project."
Greater Vancouver Home Builders Association CEO Peter Simpson said builders have sold their standing inventory and have been enjoying success with new projects since the early summer.
"That results in higher starts and puts more people back to work," he said.
Still, actual starts for August in the Vancouver area are down 41 per cent from last year. For the year to date, they're off 65 per cent. CMHC expects starts for the area in 2009 to be down about 50 per cent from last year's level.
Urban housing starts in B.C. also led the nation between July and August, jumping 56 per cent at a seasonally adjusted annual rate Nationally, home construction rose by a greater-than-expected 12.1 per cent in August.
Separately, RBC Economics said that owning a home in Canada is getting more affordable but that trend could soon end. "The national home affordability level has been restored to pre-housing boom levels," said Robert Hogue, RBC senior economist said.
"However, the recuperative phase of the affordability cycle seems to be drawing to a close with housing prices firming up in many parts of the country and mortgage rates no longer trending downward."
In Vancouver, the proportion of pre-tax income needed to maintain a detached bungalow was 63.4 per cent, the highest among large Canadian cities.
In Toronto, ownership costs worked out to 46.5 per cent, while in Calgary it was 35.7 per cent.