A new construction forecast has scaled back predictions of the number of new homes that will be built in Greater Victoria this year and next.
The capital region will see 1,650 homes started in 2012, Canada Mortgage and Housing Corp. said in its fall forecast. That's down from the 1,800 starts predicted in its spring forecast for this year.
Even so, predictions for 2012 starts are up slightly from the final count of 1,642 in 2011. The 10-year average is 1,979.
The 2013 forecast has also been reduced by the federal agency to 1,800 from its earlier forecast of 1,900.
"Housing starts are forecast to increase next year as builders and developers continue to respond to local job and population growth," Etienne Pinel, CMHC senior market analyst, said Monday. "Competition from a well-supplied resale market is expected to keep the number of starts below their usual historical average both this year and next."
Casey Edge, executive officer for the Victoria office of the Canadian Homebuilders Association, said the condominium sector accounts for most of the housing starts in the region. Low interest rates and lower costs for labour and materials are among factors spurring the projects, he said.
"Single-family is hurting in terms of housing starts," Edge admitted.
A total of 478 single-family houses were started in Greater Victoria between January and September, compared with 430 for the same months last year, he said. Single-family homes are going up in the West Shore, mainly due to lower land prices. Single-family home builders have increasingly turned to renovation work.
Victoria's new-housing price index dropped by three per cent in August from August 2011, Statistics Canada data shows.
Last month, 4,876 properties were up for sale through the Multiple Listing Service at the Victoria Real Estate Board, down from 5,025 in September.
Condominium construction is active in the capital region. Examples include the 10-storey Mondrian on Cook Street, the Duet in James Bay with 90 units, the 36-unit Sovereign on Broughton Street, the $1-billion mixed-use Capital City Centre in Colwood and the 21-storey Promontory at Bayview Place at Songhees.
Capital region building intentions were strong in September with $71.8 million worth of building permits. Of that, residential represented $32.4 million, up from $25.3 million in August, Statistics Canada reported Monday.
Meanwhile, total real estate sales for this year in the region are anticipated to come in at 5,700, said CMHC. Last year's sales of single-family houses, condos, townhouses and manufactured homes were close to 5,400.
Next year's sales will likely reach 5,800, fuelled by full-time job growth, continuing low mortgage rates and stable prices, CMHC said.
For the first 10 months of this year, total sales have declined by 2.5 per cent and the total value of those sales decreased by 5.4 per cent compared to the same months last year.
Real estate associations believe tighter rules for government-insured mortgages are partly to blame for lower sales because homebuyers need more money to buy the same home.
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