British
Columbia's big boom
By Frank
O'Brien
 |
With the highest increase
in both housing starts and renovation spending in Canada, British Columbia is
roaring through the third year of an unprecedented residential real estate boom.
The construction pace reflects a startling turnaround in the province after
nearly a decade of stagnation.
The value of building permits issued in B.C. in the first half of 2004 totaled
a record $4.15 billion, an increase of 41.4 per cent over the same period in
2003 - the sharpest increase in Canada and more than four times the national
average of 9.4 per cent - according to Statistics Canada.
B.C. will have the strongest economic performance among all provinces in 2005,
says the most recent Toronto Dominion Bank's Regional Economic Outlook report.
Growth of 4.1 per cent is forecast for the province next year, compared to a
national average of 3.5 per cent. And, confirms Canada Mortgage and Housing
Corporation, which presented its Outlook conference this November in Vancouver,
B.C. will have Canada's highest increase in housing starts during 2004. CMHC
expects new housing starts to increase 21.1 per cent this year. B.C. is also
forecast to be the only province where housing starts will continue to accelerate
in 2005, when starts are expected to reach 32,000 units.
More important
for many builders in the province, B.C. has now moved back into third place
for housing starts in the country, eclipsing Alberta for first time in eight
years.
In Vancouver, where the housing market hit a frenzy this spring, more than
2,500 new condos are under construction but an estimated 90 per cent of these
have already sold. In May, a developer announced he was converting an old
office building into condos. All 150 units sold in two days at prices approaching
$500 per square foot.
The resale housing market is expected to hit 100,000 units this year, beating
the previous record of 93,500 sales back in 1992. And this is despite soaring
prices. The average MLS price of a Greater Vancouver house is now $504,000
and it is close to $258,000 in the rest of the province, reports the B.C.
Real Estate Association.
There have been signs of a cooling recently, as resales slipped lower in Greater
Vancouver, the Fraser Valley and Victoria. Also, Greater Vancouver housing
starts dipped 14 per cent in September to 1,682 units compared to the same
period last year. Multiple starts declined 21 per cent to 1,210 units, while
single-detached starts increased 13 per cent to 472 units.
Still, few see signs of a long-term downturn. Cameron Muir, CMHC senior market
analyst, noted: "A recent trend of households moving from other provinces
to B.C. and a shift toward more full-time employment... will further bolster
housing demand for the balance of this year and through 2005." CMHC is
forecasting 31,700 starts this year, up from 26,000 in 2003 and nearly twice
as high as in 2001.
Renovations
Largely due to the strong resale housing market, renovation spending in B.C.
is forecast to rise 8.9 per cent in 2005 after posting a 10.3 per cent hike
this year, to $4.5 billion. This year was the biggest increase in the country
and next year will be the same, according to Muir.
In Chilliwack, just south of Vancouver, a single project shows the power of
the market. Here the largest renovation project in the province is refurbishing
some 200 older military houses under a contract by Canada Lands Corp. However,
buyers have been snapping up the houses before they are even finished, according
to renovator Mark Gore of Garrison Estates. HB
