Homebuilders in Greater Victoria have been busy this year, leading industry insiders to suggest the region is seeing a full-blown economic recovery.
According to numbers released Friday by Canada Mortgage and Housing Corporation, the region has seen 744 new housing units started since January, nearly triple the number underway over the first four months of 2014.
“Certainly, these are numbers we haven’t seen in quite a while,” said Casey Edge, executive director of the Victoria Residential Builders Association.
Edge said there are a number of factors driving builder confidence to start new homes, including low interest rates, increasing population, a strong resale market, declining inventory and solid employment.
“I would say that if people have been sitting on the fence of the housing market, they might want to look closely. They will see prices increasing. That’s significant as it could be a sign of the start of significant recovery, one we’ve been waiting for in this market for years,” Edge said. “And a lot of that is tied to employment. We are not building homes, even with the low interest rates, unless people are employed.”
Statistics Canada said Friday Victoria saw its unemployment rate edge up to 6.1 per cent in April, an increase over the 5.0 per cent in March and up over the 5.4 per cent recorded in April last year.
Despite the slight rise in unemployment, Edge said the increase in building activity is a sign there is consumer confidence because of strong employment. He pointed to the increase in single-family home starts as the ideal example of consumer confidence.
So far this year, there have been 201 detached homes started, up from 162 through the first four months of 2014. There have been 543 multi-family starts this year, up from 89 at the same time last year.
“Construction activity in both the single-detached and multi-family housing segments trended upwards in April, particularly starts of rental apartments,” said Sarena Teakles, senior market analyst for Canada Mortgage and Housing Corp.
Edge said they are expecting to see an increase in the price of new homes as well.
“The new-home price index has been in decline since 2008 in Victoria,” Edge said. He cited a Statistics Canada study showing the price of a new home has dropped by about 18 per cent over the last seven years. “There’s an indication that is starting to turn around — and it’s long overdue if you have been in the industry.”
