Greater Victoria will buck a national trend and will see an increase in the number of new homes, says a new report from Canada Mortgage and Housing Corp.
The region will see 1,700 starts this year and 1,800 in 2015, an increase of 0.9 per cent and 6.8 per cent over the 1,685 in 2013.
“We see a more stable, balanced resale market in Victoria and that leads to improvements on the home-construction side,” said Carol Frketich, the federal agency’s B.C. economist.
Frketich said the province as a whole will also see an increase in home construction fuelled by low interest rates and improving economy.
Across the province this year, CMHC expects 27,800 starts in 2014 and 2015, up from 27,054 last year.
There is a shift toward more single-family homebuilding this year and next, which Frketich believes is a sign of stronger demand spurred on by a more buoyant economy.
That’s the general sense on the ground in Victoria, said Casey Edge, executive director of the Victoria Home Builders Association.
“Everything we’re hearing from the builders is things seem to be picking up,” he said. “The prediction is that will be most evident in the second half of this year.
“And we are anticipating a stronger performance from single-family housing starts, which is a really good indicator of a reasonably recovering housing market,” he said, adding 2013 was a “tough year all around.”
The CMHC report said this year Victoria will see 550 single-family homes started and 590 in 2015, an improvement from the 514 started in 2013.
The report noted multi-family starts, such as condominiums and townhouses, will drop slightly to 1,110 in 2014 and then improve to 1,215 in 2015. There were 1,171 multi-family starts in 2013.
“Multiples have been propping up the housing starts in Victoria,” said Edge. He added it used to be a 50-50 split, but now single-family homes amount to about a third of all starts.
Builder Mike Miller of Abstract Developments shares Edge’s outlook for the region, though he’s betting on continued strength in the multi-family market.
“I’m very confident that in certain market segments there will be renewed vibrancy in the capital region,” he said. Abstract is currently working on townhomes and condominium projects. “We are excited to see what the next couple of years brings.”
Miller said his focus on multi-family projects is about following an evolution within the market.
“We are focusing on downsizers,” he said, adding consumers are increasingly making lifestyle choices that no longer require a detached home. “It’s not just about affordability. It’s a choice. People are saying if you can give me 1,200 to 1,300 square feet with two bedrooms and a den that’s walkable to work, I will make the switch.”
Across Canada, builders are expected to reduce starts in 2014 and 2015.
CMHC estimates there will be about 187,300 housing starts in 2014, with a range of between 176,600 and 199,800 units on an annual basis.
