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August 2009

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Prices Down on Apartment Building Construction - August 20, 2009

The composite price index for apartment building construction decreased 1.1% in the second quarter to 136.7 (2002=100) compared with the previous quarter according to a report released this morning by Statistics Canada. As was the case in the previous quarter, the quarterly decrease was mostly the result of declines in construction material prices and competitive conditions due to a weaker building construction market, most notably in Western Canada.

Among the seven census metropolitan areas (CMAs) surveyed, Edmonton (-2.8%) recorded the largest quarterly decrease while only Halifax (+0.5%) showed an increase.

Year over year, the composite price index for apartment building construction was down 6.9%. Of the CMAs surveyed, Vancouver (-15.0%) recorded the largest decrease while only Montréal (+2.3%) and Halifax (+1.5%) had increases.

The apartment building construction price indexes provide an indication of new construction cost changes in six CMAs (Halifax, Montréal, Toronto, Calgary, Edmonton and Vancouver) and the Ottawa part of the Ottawa–Gatineau CMA.

Besides each of the CMA indexes and the composite index, there are further breakdowns of cost changes by trade groups within the building (structural, architectural, mechanical and electrical). These price indexes are derived from surveys of general and special trade-group contractors who report on the categories of costs (material, labour, equipment, taxes, overhead and profits) relevant to the detailed construction specifications included in the surveys.

Contractors Selling Prices Still Decreasing - August 12, 2009

Contractors selling prices decreased 0.2% in June compared with a 0.1% decline in May. A Statistics Canada report released today shows that between May and June, prices declined the most in Vancouver (-0.9%) followed by Edmonton (-0.8%) and Victoria (-0.5%).

In Vancouver, some builders lowered their prices to stimulate sales and sell off their houses in inventory while others offered free upgrades and cash incentives. A small number of builders did increase their prices on some popular models that were selling well. In Edmonton, lower negotiated selling prices between builders and homebuyers are the primary reason for the monthly decrease.

The largest monthly increase in new housing prices was recorded in Saskatoon (+0.5%), followed by 0.4% increases in both Winnipeg and St. John's. Montréal, Ottawa–Gatineau and Hamilton saw monthly increases of 0.1%.

In June, the New Housing Price Index was down 3.3% from its level in June 2008, with the largest declines registered in Western Canada. On the Prairies, 12-month declines were recorded in Edmonton (-11.7%), Saskatoon (-10.4%), and Calgary (-8.0%). On the West Coast, Vancouver (-9.1%) and Victoria (-7.0%) also posted year-over-year declines. The decreases in these five Western Canadian cities follow a period of significant highs in the new housing price indexes at the end of 2007 and the beginning of 2008, when strong economic conditions and high demand for new housing pushed up contractors' selling prices.

Among surveyed cities, the largest increase between June 2008 and June 2009 was registered in St. John's (+10.3%), due to the continued strength of the local economy. In Québec, the 12-month growth rate was 6.8%, while in Montréal, prices increased 1.9%. Compared with June 2008, contractors' selling prices were 3.6% higher in Saint John, Fredericton and Moncton. Regina (+3.5%) and Winnipeg (+1.7%) also posted increases.

Housing Starts Temporarily Down - August 11, 2009

The seasonally adjusted annual rate of housing starts decreased to 132,100 units in July from 137,800 units in June, according to Canada Mortgage and Housing Corporation (CMHC).

“The slight decline in July’s housing starts is mostly attributable to the volatile multiple starts segment,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “Although July registered a decline, housing starts are expected to improve throughout 2009.”

Over the next several years, housing starts will gradually become more closely aligned to demographic demand, which is currently estimated at about 175,000 units per year.

The seasonally adjusted annual rate of urban starts decreased 5.5 per cent to 113,500 units in July. Urban multiple starts decreased nine per cent to 61,000 units, while urban single starts moved down 1.1 per cent to 52,500 units in July.

July’s seasonally adjusted annual rate of urban starts increased 16.6 per cent in Quebec. Urban starts declined 17 per cent in the Prairies, 15 per cent in Ontario, 10 per cent in British Columbia, and 1.4 per cent in Atlantic Canada.

Rural starts were estimated at a seasonally adjusted annual rate of 18,600 units in July.

GVRD Housing Sales Remaining Strong - August 6, 2009

The Greater Vancouver housing market gained further momentum in July with record sales levels and a continued strengthening of home prices.

The Real Estate Board of Greater Vancouver (REBGV) reports that the number of residential property sales in Greater Vancouver totalled 4,114 in July 2009, becoming the highest volume of sales ever recorded within the REBGV for that month, outpacing the 4,023 sales in July 2003, which is the only other year that July sales exceeded the 4,000 mark.

Since the beginning of the year, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver has increased 9.2 per cent to $528,821 from $484,211. However, home prices compared to July 2008 levels are down 5 per cent.

“Home sales this summer are seasonally higher than normal, which is due in large part to the price correction that has taken place in the last year and low interest rates,” Scott Russell, REBGV president said. “Although wellpriced listings and lower-to mid-range priced properties remain in the highest demand across Greater Vancouver, recent activity from first-time buyers is beginning to boost demand in the “move-up” segment of the market.”

New listings for detached, attached and apartment properties declined in Greater Vancouver, down 17.4 per cent to 5,041 in July 2009 compared to July 2008, when 6,104 new units were listed. At 12,482, the total number of property listings on the Multiple Listing Service® (MLS®) declined 5.8 per cent compared to last month and 34 per cent compared to July 2008.

“It is currently taking, on average, 48 days for a home to sell in the region. Today’s market activity differs by area and property type and it’s important to tap into local housing market expertise to understand why some properties are attracting multiple offers, while others are not moving,” Russell said.

July 2009 home sales declined 3.4 per cent compared to June 2009, but are up 89.2 per cent when measured against the 2,174 sales recorded in July 2008.

Sales of detached properties in July increased 95.2 per cent to 1,614 from the 827 detached sales recorded during the same period in 2008. The HPI benchmark price for detached properties declined 5.5 per cent from July 2008 to $711,702. Since the beginning of the year, the benchmark price for detached properties in Greater Vancouver has increased 9.8 per cent.

Sales of apartment properties in July 2009 increased 76.8 per cent to 1,708, compared to 966 sales in July 2008. The benchmark price of an apartment property declined 4.3 per cent from July 2008 to $365,291. Since the beginning of the year, the benchmark price for apartment properties in Greater Vancouver has increased 9.6 per cent.

Attached property sales in July 2009 are up 107.9 per cent to792, compared with the 381 sales in July 2008. The benchmark price of an attached unit decreased 4.6 per cent between July 2008 and 2009 to $452,085. Since the beginning of the year, the benchmark price for attached properties in Greater Vancouver has increased 6.8 per cent.

Construction Intentions High in BC - August 6, 2009

The value of building permits across the country totalled $5.2 billion in June, up 1.0% from May according to a report released this morning by Statistics Canada. The increase was attributable to gains in both residential and non-residential construction intentions and British Columbia was a large contributor.

In the non-residential sector, the value of permits rose 1.5% to $2.5 billion, following an increase of nearly 20% in May.

The value of permits increased for the fourth consecutive month in the residential sector. Construction intentions climbed 0.5% to $2.7 billion in June. Half of the provinces, led by Quebec, posted gains.

The national increase was due to advances in seven provinces. The largest gains were in British Columbia and Quebec, as a result of increases in every component of the residential sector and the non-residential sector.

Since the beginning of 2009, the value of permits has fallen by 26.2% compared with the same period a year earlier. The institutional component of the non-residential sector was the only component that posted a gain compared with the first six months of 2008.

Non-residential sector: The commercial component is up

In the commercial component, the value of permits rose 10.6% to $1.3 billion. This change was attributable to an increase in hotel and laboratory construction intentions in Ontario. In contrast, Saskatchewan and British Columbia experienced the largest declines in this component.

The value of institutional building permits fell 6.2% to $902 million in June, after increasing 55.6% in May. Increases in seven provinces were not enough to offset the decrease in construction intentions for medical buildings in Alberta.

In the industrial component, the value of permits dropped 7.1% to $332 million, ending its string of three consecutive monthly gains. Alberta and Quebec were responsible for most of June's decrease.

Residential sector: Higher intentions for single-family permits

The increase in building permits for single-family dwellings canceled out the decline (in dollar terms) in permits for multi-family dwellings. Municipalities issued $1.7 billion worth of building permits for single-family dwellings in June, 3.6% more than in May. Quebec, Alberta and British Columbia posted the largest gains. Only Ontario, Manitoba and Saskatchewan had decreases.

The value of building permits for multi-family dwellings fell 4.1% to $1.0 billion, following a 40.1% increase in May. The decline in June was mostly attributable to lower constructions intentions in Ontario.

Municipalities approved the construction of 12,693 new dwellings in June, down 4.3%. The decrease was primarily due to an 11.1% decline in the number of multi-family dwellings, which totalled 7,064 units in June. The number of single-family dwellings approved rose 5.9% to 5,629 units.

Increases seen in seven provinces

The value of building permits was up in every province except Alberta, Saskatchewan and Prince Edward Island.

The sharpest increases were recorded in British Columbia (+30.3%, for a total value of $632 million), which had gains in every component except commercial and industrial building permits. Quebec came next (+11.0%, for a total value of $1.2 billion), as a result of increases in every component except industrial permits.

Alberta and Saskatchewan posted the largest declines, largely due to lower construction intentions in the non-residential sector.

Metropolitan areas: Increase in Montréal and decline in Calgary

The total value of permits was down in 19 of the 34 census metropolitan areas.

The largest advances were observed in Montréal and Hamilton, as a result of gains in every component of the residential and non-residential sectors. Kelowna followed with an increase in the value of institutional building permits.

In contrast, the total value of permits in Calgary declined in June, following an increase in the value of institutional building permits in May.

 

 

 

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