A condo building boom helped B.C. lead all regions of Canada in increases in the seasonally adjusted annual rate of urban housing starts in August, Canada Mortgage and Housing Corp. reported Thursday.

Urban housing starts rose 33.8 per cent in B.C. in August to a seasonally adjusted annual rate of 37,200, “due entirely to the rise in multiple starts,” CMHC said.

But the national rate for urban housing starts rose just 11.9 per cent (to 214,700 units) in August, a healthy increase but small enough to prompt analysts to suggest the rate may have peaked.

Royal Bank assistant chief economist Derek Holt forecast housing starts to cool off by the end of next year. “The ability of the housing sector to contribute to overall economic growth will have turned the corner and actually we’re looking at it becoming a drag at that point,” Holt said.

“It’s still very strong, very high and elevated levels of activity, and blows away most of the years in which we had relatively depressed house construction numbers in the 1990s.” Holt attributed the decline to an exhaustion of pent-up demand, the effect of high house prices and increasing mortgage rates.

The Crown corporation said the increase nationally was, as in B.C., mainly due to the high level of starts of buildings such as condominiums, which increased 35.9 per cent to 114,600 in August, while individual home starts fell 6.9 per cent to 100,100 on a seasonally adjusted annual basis.

“High activity in the resale market also confirms that demand for home ownership remains strong while creating spill-over demand in the new-home market,” said Bob Dugan, chief economist at CMHC’s market analysis centre.

© The Vancouver Sun 2004