CMHC says January’s starts were slowed by heavy rains
Scott Simpson
Sun
Greater Vancouver housing starts fell off last year’s torrid pace in January but real estate pundits remain confident that 2005 will be another boom year for the region’s market.
The Canada Mortgage and Housing Corp. reported on Tuesday that builders initiated construction on 1,341 units last month.
That’s a decline of 17 per cent from the same period a year earlier and the CMHC blamed the rain that fell in buckets at mid-month for holding back an industry that’s predicted to remain one of British Columbia‘s hottest sectors.
Greater Vancouver single family home construction was off 26 per cent and multi-family housing off 15 per cent.
Vancouver and Surrey took the biggest hits, with starts down 35 and 49 per cent respectively, while Port Moody made the most notable move ahead with 152 new multi-family units under way compared to 12 in January 2004.
Greater Vancouver actually fared better than most other census metropolitan areas (CMAs) in British Columbia, compared with 2004.
Kelowna was hardest hit, off 67.6 per cent from a year ago, while Victoria was down 54.9 per cent and the Abbotsford CMA was down 40.8 per cent.
Smaller British Columbia communities, by contrast, were thriving with an overall 54 per-cent increase in housing starts last month.
CMHC Vancouver senior market analyst Cameron Muir said snow and torrential rain probably stopped the industry from approaching the 10-year high it recorded in January 2004.
Nonetheless, Muir noted, it was the second-best January for housing starts in a decade despite losing about “25 per cent” of potential construction time to the weather.
“Builders and developers are probably not likely to begin construction when the lot is a lake,” he said.
“If you combine the exceptionally high number of starts in January 2004, and the poor weather this past January, then it was highly unlikely we would see the starts reach the levels they did the year before.”
The CMHC employs a set of enumerators who physically visit every single construction site in the region, and don’t register a housing start unless the foundation is complete for a single family home, or a parking garage is completed for a condominium.
The corporation’s provincial economist, Carol Frketich, had earlier forecast 2005 as the sixth consecutive year of growth for B.C. housing starts — with all of those years above the long-term provincial average.
“We expect around 20,000 units started in Greater Vancouver this year,” Muir said. “Last year we achieved around 19,430 units. It’s about two and a half times what it was in the year 2000 when we only had 8,203 starts.”
Greater Vancouver Home Builders Association CEO Peter Simpson described the drop as “a matter of timing” and said a turnaround is imminent.
“One month is not an indication of what’s going to happen,” Simpson said. “There’s a lot of new projects coming on through the spring.
“I’m hearing from builders who say they have nothing available right now, that they’ve run out of product at many projects. There’s likely to be some catchup as we move into the spring.”
Muir said home builders and developers are “going very strong” at bringing new projects on line.
But he said they face some constraints including a lack of available land.
“The best sites have already been taken. Many developers are looking at brown field sites now in order to find a site that’s large enough and close enough into town that it makes sense for them. That’s certainly a new trend for them.”
© The Vancouver Sun 2005