Although total home building remains behind the pace set last year, new figures released Monday by Canada Mortgage and Housing Corp. suggest Victoria’s economy is growing stronger.
Casey Edge, executive director of the Victoria Residential Builders Association, said the October data indicates both confidence and optimism. “In terms of single-family home building, we’re ahead of last year, and that’s an important number for us because it’s the single-detached homes that are the indicator that young people are getting jobs and starting families,” Edge said. “Employment is the critical piece, and more single-family home starts is very good news.”
The latest data from CMHC shows there were 48 single-family homes started in October, up from 38 in October 2013. So far this year, there have been 471 single-family homes started in Greater Victoria, up from 429 through the first 10 months of last year.
The number of multi-family builds, such as condominiums and apartments, has dropped through 2014.
In October, there were 38 units started, up slightly from the 35 started at the same time last year. However, through the first 10 months of the year ground has been broken for 587 multiples compared with 841 at this time in 2013.
“The multis go up and down and there’s a variety of factors that go into it like permit applications,” said Edge. “And the multis have been the main driver of starts for the last several years, so it was going to take a breather at some point and that’s what’s taking place now.”
As a result of the drop in condominium projects, the total starts through October this year was 1,058, down from 1,270 in 2013.
CMHC said housing starts were trending at 1,544 units in October, compared with 1,482 in September.
The “trend” measure is a six-month moving average of the seasonally adjusted annual rate and is designed to give a complete picture of the state of the housing market.
“The trend in construction activity in both the single-detached and multiples housing segments expanded moderately in October. Both of these results reflect the prevailing balanced market conditions for new and resale homes in the Victoria area,” said Eric Bond, CMHC senior market analyst.
Tim Ayres, president of the Victoria Real Estate Board, said the market for new homes remains steady.
“It’s similar to the market for older homes. There are a certain amount of consumers that are interested in brand new builds. We certainly see the appetite for new developments in the western communities,” Ayres said. He noted Westhills has just opened a new section for sale based on the success of recent offerings.
Ayres said 116 single-family builds are on the multiple listings service, though less than 10 per cent of those are in the core municipalities and the majority are on the West Shore.
“That said, is a new home likely to sell for a higher price or faster than an older home? We don’t have evidence of this sort of a trend. You could imagine that for every person looking for a brand new home there is another who values an older, renovated home more. That tends to level out the market,” Ayres said.
But it could improve next year. In CMHC’s fall outlook, the corporation predicted an influx of new people, job growth and continued low interest rates will drive new housing construction up by 20 per cent in 2015.
“Based on migration, we are also optimistic moving forward,” said Edge. “Next year, I anticipate incremental increases in single-family homes driven by an improving economy and employment for [young people].”