Housing starts increased dramatically in June in Vancouver, according to CMHC data released July 9.
Construction started on 25,390 units, seasonally adjusted, in June in the city – an increase of 46% compared with 17,384 units in May.
“While single-detached home-building held steady in June, multiple-unit starts trended higher,” said Robyn Adamache, CMHC Principal Market Analyst for Vancouver. “Apartment and townhome construction drove the increase in the trend measure of housing starts this month.
“So far this year, townhome building has been focused in Surrey and Langley, while new apartment projects have been concentrated in Burnaby, North Vancouver, Richmond, Surrey and the City of Vancouver.”
A similar increase was seen across British Columbia as a whole, as the number of housing starts jumped to 35,001 units in June from 24,113 in May.
“The trend level of housing starts edged higher [in B.C.] in June as more townhomes and apartments got underway compared to May,” Adamache said.
“Single-detached starts have maintained a steady pace since the beginning of the year.
Nationwide, starts increased to 202,818 compared with 196,981 in May. This was driven by growth in Vancouver, Montreal (up 66%) and Calgary (up 54%). Regina saw the country’s biggest percentage increase at 120%.
Diana Petramala, economist at TD Economics, said construction is starting up after a slow winter.
“The Canadian housing market continues to defy expectations, even with the economy contracting modestly through the first half of the year,” Petramala said.
“A sharp drop in interest rates has proven to be a powerful tool for stimulating housing activity even in a challenging economic environment.”
Petramala said housing momentum should stay strong as the Bank of Canada is expected once again cut the overnight rate at its next interest rate announcement July 15.
“Overall, vibrant demand and sharply growing home prices are likely to encourage more building activity through the rest of 2015 and into 2016,” she said.
“A comforting fact is that construction of units for rental purposes, not homeownership, have been driving the acceleration in new home construction over the spring months, particularly in Toronto and Vancouver.
“Rental markets in these key cites are relatively tight and the uptick in construction activity among this sector is long overdue.”
