Housing construction numbers healthier
By Marty Hope, Calgary Herald
By Marty Hope, Calgary Herald
July 18, 2009
Calgary's housing market is beginning to look more like a typical residential construction environment--except for the numbers.
After two straight monthly increases in construction starts of single-family homes, there was a slight decline in June--something that historically happens at this time of year.
Work started on 374 detached homes last month--not far off the 450 starts for June 2008--a small decrease from this May's 382 starts, says Canada Mortgage and Housing Corp.
A year ago, the new home market peaked at 475 starts in May, then started a long downhill slide that would take it through to March of this year.
What also makes this look more like a normal marketplace is the fact building permits are up, an indicator of activity in the next month or so.
But this, too, should be marked with an asterisk because many of these permits were timed to get approval before new fire code regulations come into effect.
The city's development and building approvals department gave the nod in June to 386 permits for detached home construction with a value of $96.5 million.
During the same month last year, 266 permits were approved with a value of $64.9 million.
"There were a huge number of permits filed because builders had already done their design work and wanted to get moving with construction," says Graham Boyce, president of Jayman MasterBuilt.
But in terms of sales, he says that the pace of activity is stronger than he expected.
"I think what you're seeing is people who are trying to buy at the bottom of the market
and take advantage of the current mortgage rates," says Boyce. "But if they miss the bottom by ten grand, it doesn't matter because rates are so appealing."
A typical Calgary housebuilding market has a decline coming into the summer, with an increase in activity in the fall for buyers looking to get into a new home before Christmas.
"Looks like we're on track for an increase in construction coming into the fall," says Richard Corriveau, manager of market analysis for CMHC. "The building permits figures are a positive sign."
The housing industry is beginning to right its ship, which was getting a severe list to it.
Show home interest and sales are showing a renewed strength, while Guide the inventory of complete but unoccupied homes is on the decline.
CMHC figures show the inventory of available homes was 652 at the end of June, down from 754 in January.
"The resale market is continuing to increase activity and affordability--because of low mortgage rates and house prices-- and is gaining traction in the marketplace.
"I see an improvement in housing starts as we move toward the fall," he says. "It's still in a decline, but not as pronounced as it was." Comparing June to the same month last year, the decline is just 17 per cent. Back in January, the monthly comparison showed a gap of 44 per cent.
"Low mortgage rates and recent price declines are supporting new home sales, which should lead to further improvement in the months ahead," says regional economist Lai Sing Louie of CMHC.
For the first half of this year, work started on 1,549 detached homes, a decline of 34 per cent from a year ago.
Across the province, single-family home construction was down less than eight per cent in June compared to the same month last year, with work starting on 844 homes.
After two straight monthly increases in construction starts of single-family homes, there was a slight decline in June--something that historically happens at this time of year.
Work started on 374 detached homes last month--not far off the 450 starts for June 2008--a small decrease from this May's 382 starts, says Canada Mortgage and Housing Corp.
A year ago, the new home market peaked at 475 starts in May, then started a long downhill slide that would take it through to March of this year.
What also makes this look more like a normal marketplace is the fact building permits are up, an indicator of activity in the next month or so.
But this, too, should be marked with an asterisk because many of these permits were timed to get approval before new fire code regulations come into effect.
The city's development and building approvals department gave the nod in June to 386 permits for detached home construction with a value of $96.5 million.
During the same month last year, 266 permits were approved with a value of $64.9 million.
"There were a huge number of permits filed because builders had already done their design work and wanted to get moving with construction," says Graham Boyce, president of Jayman MasterBuilt.
But in terms of sales, he says that the pace of activity is stronger than he expected.
"I think what you're seeing is people who are trying to buy at the bottom of the market
and take advantage of the current mortgage rates," says Boyce. "But if they miss the bottom by ten grand, it doesn't matter because rates are so appealing."
A typical Calgary housebuilding market has a decline coming into the summer, with an increase in activity in the fall for buyers looking to get into a new home before Christmas.
"Looks like we're on track for an increase in construction coming into the fall," says Richard Corriveau, manager of market analysis for CMHC. "The building permits figures are a positive sign."
The housing industry is beginning to right its ship, which was getting a severe list to it.
Show home interest and sales are showing a renewed strength, while Guide the inventory of complete but unoccupied homes is on the decline.
CMHC figures show the inventory of available homes was 652 at the end of June, down from 754 in January.
"The resale market is continuing to increase activity and affordability--because of low mortgage rates and house prices-- and is gaining traction in the marketplace.
"I see an improvement in housing starts as we move toward the fall," he says. "It's still in a decline, but not as pronounced as it was." Comparing June to the same month last year, the decline is just 17 per cent. Back in January, the monthly comparison showed a gap of 44 per cent.
"Low mortgage rates and recent price declines are supporting new home sales, which should lead to further improvement in the months ahead," says regional economist Lai Sing Louie of CMHC.
For the first half of this year, work started on 1,549 detached homes, a decline of 34 per cent from a year ago.
Across the province, single-family home construction was down less than eight per cent in June compared to the same month last year, with work starting on 844 homes.
