Bruce Constantineau
Sun
B.C. housing starts will drop by about six per cent next year as high house prices and slowly rising interest rates combine to “calm” the province’s surging housing market, Canada Mortgage and Housing Corp. predicts in its third-quarter housing outlook report released Thursday.
The report said a strong B.C. economy and high consumer confidence in the province will fuel the construction of 33,600 housing units this year but a slight decline in activity next year will see 31,600 new units built in 2006.
A report from housing analysts Clayton Research predicts very similar housing starts numbers for B.C., with annual starts falling from 33,600 this year to about 32,000 in 2006.
The Clayton report said the B.C. housing market will benefit as the province gears up for the 2010 Olympics but notes that sluggish activity in some housing resale markets so far this year indicates the market could be due for a small adjustment.
Cressey Development Corp. vice-president Hani Lammam said the biggest constraint to new housing starts now is the fact that most B.C. builders are already working at full capacity and can’t build enough new homes to keep up with the demand.
“Municipalities are overwhelmed and they can’t get projects approved quickly enough,” he said in an interview. “We just can’t generate the housing that’s needed and we don’t expect demand to fall off. The economy is still good and the population is still growing.”
Lammam said Cressey expects to build 1,500 housing units this year and 1,200 in 2006, as the company faces a shortage of people needed to build more homes. “We don’t have enough trades people, we don’t have enough accountants and we don’t have enough project managers,” he said.
© The Vancouver Sun 2005