New home starts in B.C. rise sharply compared to last year

New home construction in B.C. has picked up significantly from a year ago, according to a report released Monday by Canada Mortgage and Housing Corp.

The report by Canada's national housing agency said that in the first quarter of 2010, foundations were poured across the province for 5,337 new homes, more than double the 2,522 in the first quarter of 2009.

"It's very solid in terms of a year-over-year comparison," Carol Frketich, CMHC regional economist, B.C., said in an interview. "The strength in new home construction was very much in the single detached type. [But] multiple units are also up in the first quarter."

She noted that starts in March totalled 1,726, also more than double the 739 recorded in March 2009.

Frketich noted that the economy played a key role in giving developers increased confidence.

"It's a reflection of a stronger resale market, improving economic conditions and still relatively low interest rates."

In the first three months of 2010, a total of 2,164 single-detached homes were started compared to just 628 units a year earlier. Multiple-family home starts were also strong in the first quarter, increasing 68 per cent from a year ago and totalling 3,173 new units started.

Single-detached construction rebounded with the most strength in urban B.C. (centres with more than 10,000 people) during the first quarter of this year.

In the Vancouver Census Metropolitan Area (CMA), new home starts totalled 3,198 in the first quarter of 2010, 76 per cent higher than the same period last year.

"We continued to see strength in single detached new home construction in March, particularly in Surrey and Vancouver City," said Robyn Adamache, CMHC senior market analyst, Vancouver, in a statement.

In the Abbotsford CMA, 44 homes were started in March compared to just six a year ago. For the quarter, 107 new homes were started in Abbotsford compared to 47 for the same period in 2009,

However, in urban B.C. the seasonally adjusted annual rate (SAAR) of housing starts dipped to 22,100 units in March from 26,400 units the previous month. Of that, Frketich said the forecast was lowered because of a drop in the number of multi-unit starts. "It's a little slower in March, but the trend is still improving compared to last year."

Nationally, March housing starts edged down to 197,300 units (SAAR) from 200,400 units in February. "The moderation in March housing starts were due to the volatile multiple starts segment. Helping to offset this was an increase in singles starts as well as more activity in rural areas," said Bob Dugan, chief economist at CMHC.

Although Canadian starts are clipping along at levels not seen since 2008, economists believe it won't be sustained into the second half of the year.

(prepared by Brian Morton/Vancouver Sun)