Construction of new Vancouver homes is increasing, thanks to builders' confidence

Surrey_construction
Metro Vancouver's housing starts are on the upswing, rising to 1,783 in September over 1,644 in the same month last year, with most activity in the multi-family category, according to Canada Mortgage and Housing Corp.

Year-to-date, the numbers were even stronger, with the multi-family sector seeing a 39-per-cent increase in starts from January to September compared to the same period in 2010.

The reason for the multi-family strength, according to CMHC's senior market analyst for Metro Vancouver, Robyn Adamache, is two-fold: builders are increasingly confident taking on larger multi-family projects, and buyers are skeptical of higher-priced detached homes because they want to avoid the HST threshold of $525,000.

"On the single-family side, we're seeing a decline this year," Adamache said in an interview after the report was released Tuesday. "We think people interested in a single detached home are putting off the decision until the HST tax ramifications are sorted out.

"When the economic recovery was fragile, builders were more comfortable doing single-family starts rather than a large project. It was a more incremental way of getting out of the recession. Since the recovery has taken a better foothold, we're seeing the multi-family side pick up again."

Construction hot spots year-to-date compared to 2010 included North Vancouver, Richmond and the Tri-Cities area.

Adamache - who noted that apartment starts were concentrated in the cities of Vancouver and Richmond, while Surrey led the way in less dense housing types including single-detached and townhouse starts - said multi-unit construction has been trending higher since 2010 after declining sharply from 2008 to 2009.

She also said, "The City of Vancouver had the second highest number of single-family home starts in the region, most of which were replacement housing."

Greater Vancouver Home Builders' Association president and CEO Peter Simpson agreed in an interview that housing starts - particularly on the multi-family side - are looking up.

Source: Brian Morton
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