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

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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