After rallying in September, housing starts in the Vancouver Metropolitan Area (CMA) trended lower again in October, according to figures released by the Canada Mortgage and Housing Corporation (CMHC) November 8.
Housing starts were trending at trending at 26,074 units in October, compared with 29,537 units in September, said the CMHC. The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.
“Total housing starts trended lower in October due to a decline in apartment starts,” said Robyn Adamache, CMHC’s principal market analyst for Vancouver. “Builders are concentrating on the many existing projects already underway in the CMA.”
It was a different story in the Abbotsford-Mission CMA, where housing starts were trending at 1,153 units in October, up from 939 units in September. The CHMC said the upward trend was mainly due to an increase in apartment starts.
Across Canada, the trend measure of housing starts was 199,920 units in October, up very slightly from the 199,262 in September, reported the CMHC.
Bob Dugan, CMHC’s chief economist, said, “In October, housing starts remained stable, as the trend remained essentially unchanged from September. While apartment starts are on a downward trend in British Columbia after reaching an all-time high at the beginning of the year, increased construction of single, semi-detached and row units in the rest of the country have helped offset the decline.”
CMHC uses six-month moving averages to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations, said the CMHC, analyzing only the monthly seasonally adjusted data can be misleading in some markets, as they can be variable from one month to the next.
The latest housing starts data from the CMHC came the same day that Statistics Canada reported that building permit values have also dropped in the CMA and across the province.
Home construction permits in the Vancouver CMA in September 2016 were valued at just under $337 million, according to the statistics agency – a considerable drop of 38.5 per cent over August and 26 per cent lower than this time last year.
The largest segment of the market remained condo-apartment buildings, for which there were $147.4 million of permits issued in September, a fall of nearly 42 per cent year over year and a monthly decline of nearly 50 per cent.
There were $123.2 million worth of permits issued for single-family homes, a drop of 3.1 per cent year over year and 17.4 per cent month-over-month slide.
Townhouse and row home construction permits totalled $60.7 million, which was a year-over-year jump of nearly 40 per cent, but a decline of 35.7 per cent compared with the previous month.
Duplex permits, although they are more volatile as a much smaller segment of the market, plummeted dramatically in September. Although it does not yet indicate a trend, the meagre $1.7 million of permits issued in the Vancouver CMA during the month was down more than 80 per cent versus August and 93.4 per cent lower than in September 2015.
Across BC, September saw $684.4 million of residential building permits – a sharp drop of 26.9 per cent compared with August’s strong showing. However, this figure was a slight rise of 1.4 per cent compared with September last year.
Nationwide, increases in residential construction permit values in Alberta, Quebec and Ontario offset the monthly declines seen in BC and several other provinces. Total permits rose considerably, by 13.3 per cent year over year to $4.5 billion in September – a 5.9 per cent rise over August’s figures.
View Statistics Canada’s interactive charts here.