BC Housing Starts 2008

Housing starts in the province climbed 8 per cent to 39,195 units last year. High-density housing gained a larger proportion of total housing starts as a result of land supply and affordability constraints and consumer preferences Multiple housing starts comprised 63 per cent of total housing starts in the province last year.

Housing starts in BC climbed 15 per cent in the first quarter of 2008 compared to the same period in 2007, but housing starts are not expected to reach last year’s total by year end. Capacity constraints in the province’s large urban centers will limit new construction activity this year. The tightening of credit will also negatively impact the availability of financing and the cost of borrowing. In addition, a marked increase in resale listings and fewer investors are slowing presales of new homes and causing developers to re-evaluate their market exposure.

While housing starts may be higher in the first half of 2008, they are expected to decline during the second half, resulting in a 3 per cent decline in total starts to 37,900 units by year end. Higher new home inventories and moderating demand is expected to pull housing starts back an additional 6 per cent to 35,500 units in 2009. Multiple housing starts are forecast to increase 1 per cent this year on the strength of projects currently planned or underway. However, rising inventories are expected to reduce multiple starts by 10 per cent to 22,500 units in 2009.

“Copyright British Columbia Real Estate Association. Reprinted with permission.”