Heat returns to housing sector

Home building in urban B.C. jumped 25 per cent last month as low mortgage rates, a growing population and fewer existing homes for sale began to reheat demand for new houses.

Provincial housing starts in urban areas of the province rose to 12,000 units in June from a seasonally adjusted annual rate of 9,600 in May, Canada Mortgage and Housing Corp. said yesterday.

"The increase was entirely due to an increase in multiple-unit starts, as single-detached starts were unchanged from their May level of 4,700 units," CMHC said.

Still, total urban starts in B.C. remain below 2008 levels, CMHC said.

In the Vancouver area, builders poured foundations for 571 new residential projects last month, of which 216 were for single-detached dwellings.

Nationally, home construction rose more than expected in June as Canada's beleaguered housing market showed signs of a possible recovery.

The seasonally adjusted annual rate of housing starts increased eight per cent to 140,700 units during the month from 130,300 units in May, CMHC said.

"The increase in housing starts in June is broadly based, encompassing both the singles and multiples segments," said Bob Dugan, CMHC's chief economist.

Most economists had expected 130,000 housing starts in June.

"The Canadian housing market posted its first back-to-back monthly gain since February last year,"said Millan Mulraine, economics strategist at TD Securities.

"However, despite the strong increase, starts are down 33.9 per cent compared to their June 2008 levels, and are still 48.5 per cent below the high watermark set in September 2007."

(Source: Vancouver Province)