Housing starts show small gain

The pace of single-detached homes started in the Edmonton region picked up by 10 per cent in June over last year, said the Canada Mortgage and Housing Corp. Thursday.

Foundations were poured for 268 single-detached starts, up from 244 started in the same month last year.

That was a promising highlight in the agency's latest figures, which show total housing starts dropping by 19 per cent year-over-year--the sixth consecutive month of double-digit yearly decreases in home construction. Total housing starts in the Edmonton census metropolitan area fell to 450 units in June, from 556 a year earlier.

Another dismal month for multifamily starts drove down the total figures in June. Starts in this market totalled 182, down 42 per cent from the 312 started in June 2008. However, within the sector, semidetached and row starts increased year-over-year by 24 and 31 per cent respectively. The gains were countered by zero apartment starts reported in June, said CMHC.

As was the case in April and May, all June multiple starts were for the homeowner and condo market, with no rental starts.

"Developer concerns over rising rental apartment vacancies and a growing inventory of unabsorbed new condominiums will hold down multiple unit starts for the balance of 2009," said Richard Goatcher, CMHC's senior market analyst in Edmonton.

Across Alberta, housing starts in the seven largest centres rose to 1,446 in June, up one per cent from 1,434 a year earlier.

"Alberta's stronger housing-starts report is consistent with the modest improvements the province is seeing throughout its residential housing market," said ATB Financial senior economist Todd Hirsch.

"Prices have been gaining, inventories of existing homes have ebbed and home sales are rising. That all points to more confidence among homebuyers--and home builders are responding."

But Hirsch predicted housing starts are unlikely to match the feverish pace set in late 2007 any time soon, and it will be a bumpy ride to full recovery.

"Recent housing market strength has been boosted by record low mortgage rates. Higher rates and more economic turbulence in the future may keep Alberta's housing starts relatively subdued."