Home Starts Up, Sales Down

Stronger second half expected in B.C. housing market

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It’s still a good time to buy a home in British Columbia, despite recent slow sales and new federal mortgage rules that limit the maximum mortgage amortization to 25 years. Interest rates are still at near-historic lows and aren’t expected to change much until the global economic picture improves.

Sales up in Interior, North

The B.C. Real Estate Association reports residential sales dipped nine per cent to 38,312 units in the first half of the year and the average residential price was 8.9 per cent lower at $533,681 compared to the same period last year.

But last year, sales were higher than normal and prices went up quickly, especially for single-family homes in expensive Greater Vancouver neighbourhoods.

In June alone, sales were down 13.8 per cent and the average residential price was 12 per cent lower than June 2011 throughout British Columbia.

BCREA chief economist Cameron Muir says the downturn is likely to be temporary because of low mortgage rates, population growth and encouraging employment figures, which “suggest a stronger second half of 2012.”

He notes residential sales numbers are up in B.C.’s Interior and North; both regions had experienced moderate sales up until this year.

Starts up in June

June was a busy month for housing starts in B.C., however. Canada Mortgage and Housing Corporation reports the number of housing starts in urban areas of British Columbia was trending at 26,300 units in June; the trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of urban housing starts. The stand alone monthly SAAR was 34,100 units in June, up from 26,000 units in May.

CMHC senior market analyst Robyn Adamache notes multiple-family housing starts in Vancouver were strong and pushed provincial housing starts above trend.

“Residential construction is expected to stabilize at a level closer to trend during the remainder of the year,” she says.

Actual urban housing starts totalled 3,843 last month, compared to 2,866 recorded in June 2011.