British Columbia’s residential construction industry is three times busier than it was seven years ago, reports Canada Mortgage and Housing Corporation in its BC Region Housing Now report released during the third quarter of 2007.
New home construction in British Columbia’s urban centres increased by five per cent during the second quarter of this year, compared to the same period in 2006, reaching 8,782 units. Despite rising home prices and mortgage rates, which affects housing affordability, multi-unit starts reached their highest level for the same three-month-period since 1994, more than offsetting the 14 per cent decline in single-detached starts.
At the end of June, there were 36,190 homes under construction in urban B.C., a 12 per cent increase from the same time last year.
Chris Erb, president of the Canadian Home Builders’ Association – British Columbia and of SupErb Construction Ltd., his award-winning building company in Nanaimo, says the housing market in B.C. is so strong because of built-up demand, an industry-friendly government, the lowest personal income tax in Canada, and increasing net in-migration from other provinces. “Builders are feeling good about the market with a few cautionary notes,” he says. “There’s lots of labour in some areas but also a shortage of skilled labour and lacking education and training with some builders. Too many fingers in the pie are adding taxes, fees and levies to the process.”
Erb explains that 28 per cent of the cost of a house represents taxes, fees and levies at all three levels of government. He adds: “The black market in B.C. is alive and well.”
British Columbia Real Estate Association (BCREA) reports residential sales volume on the Multiple Listing Service® in the province climbed 20 per cent to $3.42 billion in September, compared to the same month last year. Residential unit sales increased 6.8 per cent to 7,687 units during the same period. The average residential price reached $445,205, up 12.3 per cent from September 2006.
“Housing demand hasn’t let up after a record-breaking summer,” says Cameron Muir, BCREA chief economist. “Strong economic conditions are underpinning B.C. home sales. Robust job growth, low unemployment and rising wages and salaries are bolstering consumer demand.”
Year to date, MLS dollar volume increased 18 per cent to $36 billion compared to the same period last year. Residential sales rose 4.9 per cent to 82,627 units, while the average residential price climbed 12.5 per cent to $436,062.
“The B.C. Labour Market Information (LMI) report released earlier this year shows a strong housing market through to 2013,” says Erb. “This will reduce to 30,000 starts in 2008 and decline very slightly to a level of 28,000-plus starts in 2013. The Olympics will have a long lasting effect on British Columbia, as Expo ’86 did.”
