Residential construction starts drop sharply
Residential construction starts in Red Deer last month were down from the same period a year ago, despite a big jump in the number of single-detached projects.
Canada Mortgage and Housing Corp. reported on Tuesday that there were 64 housing starts in the city in August, a 37 per cent drop from the 102 starts during the same month last year.
However, the number of single-detached homes started this year was up by 79 per cent, to 50 from 28.
The overall decline reflected a steep drop with respect to starts on other housing types, which fell 81 per cent to 14 units from 74.
In July, housing starts in Red Deer numbered 49, with 28 of these single-detached homes.
The month before that the tally was 58, including 42 single-detached projects
Over the first eight months of 2012, local builders have combined for 427 housing starts — four per cent more than the 410 generated during the same period of 2011.
Single-detached homes made up 242 of this year’s total, up from 220; other types of housing added 185, down from 190.
Among the other bigger urban centres in the province, housing starts in August 2012 as compared with from August 2011 were down in Calgary, Lethbridge and the Regional Municipality of Wood Buffalo. They were higher in Edmonton, Grande Prairie and Medicine Hat.
For the year to date, residential construction activity has increased in Calgary, Edmonton, Grande Prairie and Medicine Hat. It’s slowed in Wood Buffalo and Lethbridge.
Nationally, CMHC said the pace of housing starts picked up August, boosted by big multiple-unit projects in Toronto, even as the Canadian real estate market showed signs of cooling.
There were 19,860 actual housing units started in August, to set a seasonally adjusted annual pace of 224,900 units for the month, up from 208,000 in July.
The consensus estimate by economists had been for a seasonally adjusted annual pace of 201,000.
TD senior economist Jacques Marcil said the data shows Canadian housing construction remains in high gear and suggested the pace won’t continue.
“The rest of the economy is growing much slower and as a consequence is not likely to be able to support this level of housing supply for much longer,” Marcil warned.
“While recent changes to mortgage insurance rules will likely limit the growth in demand for new homes, low interest rates remain an incentive for buyers to borrow and keep the housing market overvalued.”