Residential building stays ahead of pace
Residential construction activity in Red Deer remains ahead of last year’s pace, with housing starts in the first quarter of 2014 up 20.8 per cent over the same period a year ago.
Canada Mortgage and Housing Corp. reported on Tuesday that ground was broken on 285 homes in the city from January to March, up from 236. This year’s total included 82 single-detached houses and 203 units in multi-family projects — as compared with 71 singles and 165 multis to start 2013.
Among Alberta’s seven largest urban centres, the Calgary metropolitan area saw the biggest year-over-year jump in housing starts, at 70.3 per cent. Medicine Hat was next at 56.2 per cent, followed by Red Deer.
First-quarter construction in Lethbridge slid 4.8 per cent, the Edmonton metropolitan area was down 18.7 per cent, the Regional Municipality of Wood Buffalo decreased 20.7 per cent and Grande Prairie tumbled 54.5 per cent.
In the case of smaller communities, Sylvan Lake’s 2014 housing starts were up 88.6 per cent, to 66 homes; while first-quarter residential construction in Lacombe declined 20 per cent, to 12 units.
For the month of March alone, Red Deer builders combined for 68 residential starts, up 30.8 per cent from 52 a year earlier.
Single-detached starts in the city slipped to 30 from 31, while multi-family starts jumped to 38 from 21.
Nationally, CMHC said that the pace of housing starts in March slipped to a seasonally adjusted annual rate of 156,823, down from 190,639 in February.
The report of a slowdown in housing starts came as Statistics Canada also said that the value of building permits issued by municipalities in February was down 11.6 per cent from January.
BMO senior economist Robert Kavcic said some of the slowdown was due in part to weather as winter hammered Atlantic Canada one more time, but that doesn’t account for all of the move lower.
“They kind of corroborate each other in a sense, that there actually is some cooling going on,” he said of the February building permits and March home start numbers.
Kavcic said the numbers were indicative of a housing market headed for a soft landing.
On a seasonally adjusted annual basis, urban starts in Canada were down 18.8 per cent in March.
On the same basis, multiple urban starts decreased by 25.5 per cent, while the single-detached urban starts segment slipped by 5.4 per cent.
Meanwhile, the drop in building permits was due in large part to a 31.5 per cent drop in the value of building permits for multi-family homes such as condos and apartment buildings. Plans for single-family homes fell 12 per cent.
However, Statistics Canada said the value of institutional building permits increased 14.9 per cent, while the industrial component rose 26.8 per cent. The value of commercial building permits slipped 0.3 per cent.
The signs of a slowdown in new home construction came as real estate brokerage company Royal LePage said the improving weather helped the market perk up in March.
“We are finally seeing the arrival of housing inventory in seasonally appropriate quantities across the nation,” said Phil Soper, president and chief executive of Royal LePage.
The company’s home price survey found the average price of a home in Canada rising between 2.5 per cent and 5.4 per cent. Regionally, Toronto, Winnipeg, Calgary and Edmonton saw the highest price increases, while parts of Atlantic Canada, with much of its inventory still under snow, posted the lowest gains overall.
With files from The Canadian Press.