Local housing starts dip in July

Wednesday, August 11th, 2004

Michael McCullough


Greater Vancouver housing starts dipped in July after a spectacular June, figures released Tuesday by Canada Mortgage and Housing Corp. show.

Work began on 1,465 units last month, 13 per cent fewer than in July 2003. But both the latter month and June were exceptional for the region, said CMHC senior market analyst Cameron Muir.

“We don’t see a change in direction,” Muir said, noting how single-family house starts rose three per cent year over year to 533 in July. Detached starts tend to better reflect the trend than starts of multi-family housing projects, which due to their very size fluctuate month to month, he said. In the city of Vancouver, there was a lull in new starts after a new development cost levy came into effect on July 1.

Muir said last month was still a solid one from a historical perspective. CMHC forecasts 19,500 housing starts in Greater Vancouver this year, more than double the 8,203 units built in 2000.

“We’re going to see strong starts and activity for the balance of this year.”

The only bad news is for landlords, who will see residential rents remain the same or decline slightly over the coming year while first-time buyers vacate the rental pool to move into new condominiums as they reach completion. CMHC anticipates the regional vacancy rate will rise to 2.5 per cent this year from two per cent in 2003.

Muir also expects price increases to moderate in the resale market as the supply of homes for sale increases. When prices rise rapidly, as they have in the past two years, more homeowners decide to put their homes up for sale, he said.

© The Vancouver Sun 2004

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