Calgary region housing starts soar by 47% in 2010

 By Mario Toneguzzi, Calgary Herald

 CALGARY – Housing starts in the Calgary census metropolitan area were up a whopping 47 per cent in 2010 from the previous year despite a recent slowdown in the homebuilding industry.  Canada Mortgage and Housing Corp. reported Tuesday that total starts finished the year at 9,262 units, up from 6,318 in 2009.  In the region, single-detached starts hit 5,782 units, an increase of 21.1 per cent from 4,775 while the multiple-family sector rose by 125.5 per cent to 3,480 units from 1,543 in 2009.

Richard Cho, senior market analyst in Calgary for the CMHC, said that since the summer builders have started fewer homes in response to higher competition from the resale market and slower new home sales.  That was reflected again in the December numbers as single-detached starts were down 40.4 per cent during the month compared with last year – the fifth consecutive month of year-over-year declines in that sector.  “There were a number of reasons that contributed to the moderation in housing demand in 2010 – the decline in full-time jobs, flat wage growth, changes to the mortgage lending criteria and weaker migration flows,”  He said single new home construction in the early months of this year are anticipated to remain relatively flat as employment continues to stabilize and the active listings in the competing resale market moves lower. “We are anticipating production to pick up in the latter half of the year. Builders are forecast to start 6,100 single-detached units in 2011,” he said.

David Hooge, president of the Canadian Home Builders’ Association-Calgary Region, said many builders had a strong carry-over of inventory from 2009 into 2010 due to stronger sales in the latter half of 2009.  “Sales continued strong in early 2010 due to some renewed consumer confidence and a sense of urgency to get ahead of the concern over mid-year interest rate hikes and new mortgage regulations,” he said. “The end of the second quarter of 2010 proved to be the end of the brisk sales we enjoyed through the first half. Slower sales continued through to the end of 2010.”  With oil prices strong, the job situation improving and resale listings falling, local home builders are moving into the spring market with some cautious optimism, added Hooge.  “If these indicators remain favourable, we should experience a conservative increase in the number of starts for 2011,” he said.

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