Condo development surges as house starts fall
Ashley Ford
Province
Like to own one of these detached homes? You’re dreaming…
Is the dream of owning a single-family home in Greater Vancouver becoming endangered?
The latest housing-start numbers from Canada Mortgage and Housing Corporation, released yesterday, show single-family starts slumping by nearly 33 per cent over the first half of the year from 2006.
Peter Simpson, head of the Greater Vancouver Home Builders’ Association, said the desire to own a single-family home remains strong. But the realities of ever-increasing land and development costs are removing that option for many.
“This may be the first generation who do not aspire to the holy grail of owning a single-family home,” he said. “We just don’t know. Many buyers will stay in multi-family homes for their whole lives.”
Andy Ni, CMHC market analyst, agreed that ever-rising home prices — they are expected to increase another six to nine per cent across the Lower Mainland this year — are forcing developers to produce more cost-effective product.
“As a result, during the first half of 2007 multi-family starts, including semi-detached, row and apartment condominiums, reached the highest level for the same six-month period since 1991.” And that explains why multi-family housing now thoroughly rules the roost in residential construction across Greater Vancouver.
CMHC said multi-family starts were up five per cent to 7,333 units in the first half compared with 6,981 last year. Single starts were 2,011, down 32.5 per cent from last year’s 2,980.
Abbotsford, where land is less expensive, is the only area where single-family housing is flourishing, with starts up 38 per cent to 253 from last year’s 183.
Overall, the Lower Mainland market remains steady. Simpson said it will likely match last year’s performance of 18,500 to 18,700 starts. So far this year there have been 9,344 starts, down 6.2 per cent from last year’s 9,961.
Simpson, however, said there are many projects in the pipeline and he doubts yesterday’s interest-rate increase will have a major impact on buyers. But he conceded every rise in interest rates removes some potential buyers from the market.
“While the recent uptick in mortgage rates may curb demand in the long term, the prospect of gradually rising mortgage rates is also spurring some potential buyers into action sooner that later,” added Robyn Adamache, senior market analyst with CMHC.
Across the country, housing starts were stronger than some analysts had predicted.
CMHC says that although the seasonally adjusted annual rate of starts was 225,500 last month, down from 235,200 units in May, analysts had only been looking for about 219,000 starts.
Urban starts decreased 4.8 per cent to 192,600 in June compared to May. Urban single starts were up 2.1 per cent, while multiple starts decreased 10.4 per cent.
© The Vancouver Province 2007