A 33-per-cent rise in urban starts for British Columbia suggests Vancouver brokers focused on first-time homebuyers may benefit from a price correction coming as early as spring 2013 and resulting from an influx of new properties.
Condos and other multi-unit housing projects continued to drive housing starts in July, according to the Canada Mortgage and Housing Corporation, pointing to a 4.3 per cent rise from the previous month.
The seasonally adjusted annual rate of housing starts was 205,100 units in July, up from 196,600 units in June 2011.
“Housing starts rose in July due to an increase in multiple starts in all regions except Quebec,” said Mathieu Laberge, deputy chief economist at CMHC’s Market Analysis Centre. “The multiples sector showed continued strength in Ontario and a significant increase in British Columbia and in the Atlantic region.”
Canada’s urban centres continued to act as the hub of that activity. The rate of urban starts increased by 4.7 per cent to 185,200 units in July, while multiple urban starts were up by 13 per cent to 120,200 units.
But B.C.’s growth outpaced that activity, with July’s seasonally-adjusted annual rate of 33 per cent in urban starts. Most were condos and, for the most part, concentrated on the Lower Mainland. The addition of more than 10,000 units, coming to market at roughly the same time – early 2013 – may help to bring prices in line with buyer budgets. That should ultimately work to the benefit of brokers hamstrung by the dearth of originations in their market.
The latest numbers from the Real Estate Board of Greater Vancouver (REBGV) suggest prices continue to move in the opposite direction.
Overall, the benchmark price for all residential properties in Vancouver was up 9.2 per cent in July compared to 12 months ago. The benchmark for detached properties is up 13.3 per cent year-over-year, and attached units are up 6.9 per cent compared to last year, reaching $524,909.
Those values – and the potential gain in commissions – haven’t been enough to make up for the dearth of new purchases, with some brokers also challenged to find the refi business they traditionally turn to in order to maintain revenue streams.