Housing starts across British Columbia remained depressed in the first quarter of 2009, falling almost 70 per cent compared with the same quarter of 2008, Canada Mortgage and Housing Corp. reported Wednesday.

While housing starts ticked up slightly in March on a national basis, builders in B.C. started work on 2,517 new homes in the first three months compared with 8,532 in 2008.

“Developers and homebuilders in B.C. are starting fewer new homes in response to a well-supplied resale market and weaker housing demand,” Carol Frketich, Canada Mortgage and Housing’s regional economist for B.C., said in a news release.

The declines in starts ranged from almost 93 per cent in Kelowna, where builders started on 72 new homes compared with 985 in the first quarter last year, to 31 per cent in Nanaimo, where builders started on 170 new homes vs. 247 in the same months a year ago.

And the pace of new-housing construction slipped in March to a pace that would see builders across urban B.C. start work on 10,000 units in 2009, compared with a pace of 12,000 units seen in February.

In the Lower Mainland, Metro Vancouver saw starts fall by two-thirds, 1,829 units compared with 5,131 in the first quarter of 2008.

Across Metro Vancouver, West Vancouver saw the steepest drop in the first quarter at 92 per cent, with the Tri-Cities and Surrey not far behind at 91 per cent.

Delta was the only municipality to see an increase in housing starts. Builders there started work on 81 new housing units, an increase of 55 per cent in the first quarter from a year ago.

“The slowing housing starts trend that began in the last part of 2008 will continue,” Robyn Adamache, Canada Mortgage and Housing’s senior analyst for Metro Vancouver, said in a news release, also citing well-supplied resale markets and a growing inventory of unsold new homes as the reasons builders are holding off on new development.

Across Canada, home construction rose unexpectedly in March, led by Ontario and Quebec, Canada Mortgage and Housing Corporation said Wednesday.

There were 154,700 housing starts on an annualized basis during the month, up from a revised 136,100 units in February, the government agency said.

Many economists had expected housing starts to dip to 130,000 units in March.

“Higher multiple starts in Ontario and Quebec were the main contributors to the rise in new construction activity in March,” said Bob Dugan, CMHC’s chief economist. “While the multiples segment experienced the largest increase, the overall boost in starts was broad based, encompassing the singles segment as well.”

http://housing-analysis.blogspot.com/2009/04/from-vancouver-sun-housing-starts.html

reviewed by Moishe Alexander, CFC CEO

Royal LePage survey – Vancouver’s real estate market is still witnessing a course correction, as prices continued to decrease in the first quarter of 2009, according to Royal LePage’s quarterly House Price Survey. The average price for homes on Vancouver’s West side and East side, North Vancouver and West Vancouver saw an average year-over-year decline of 12%.

West Vancouver home prices witnessed the largest change, seeing an overall decline of 16.3% year-over-year across key housing types surveyed, however prices stabilized in the first quarter of 2009. Average prices for bungalows dropped 16.2% year-over-year to $880,000, standard two-storey homes dropped 17% to $930,000, and standard condominium prices declined 15.8% to $400,000.

“Prices are definitely down from a year ago,” said Bill Binnie, President of Royal LePage Northshore in North Vancouver. “But prices are starting to stabilize in the middle price range.” Binnie said first time home buyers are accounting for the bulk of sales activity in Greater Vancouver, although home sales are beginning to pick up in the high-end housing market.

In North Vancouver, prices for standard two-storey homes are stabilizing, with the average price of $660,000 unchanged between the fourth quarter of 2008 and first quarter of this year. Standard condominium prices have also stabilized, up 3.6% from last quarter to $290,000. However, prices for key housing types in North Vancouver are down a year-over-year average of 14.2%.

Homes priced according to recent sales in desirable areas are selling quickly, Binnie said. In the first quarter of 2009, the West side of Vancouver saw an increasing number of million dollar home sales. “This increase in activity gives us a parameter we can use to analyze the market,” Binnie said. “Now we have a sense of what people are willing to pay. In January, there were very few sales – so we didn’t have a frame of reference.”

Binnie believes the time is right for buyers looking to move up into a more expensive property. “If you’re moving up, I’ve got great news for you. The spread between the property you want to buy today and your current home is a lot smaller than it would have been a year ago. Secondly it’s going to cost you a lot less to carry a mortgage because of the low interest rates.”

Meanwhile, Victoria home values proved to be somewhat more resilient, with an average year-over-year depreciation of 4.6%. Bungalows in the capital city bucked the trend by increasing both annually and within the first quarter of 2009. Overall, Victoria homes in key segments saw average first quarter price gains of 0.5%.

Carol Geurts, Managing Broker for Royal LePage Coast Capital Realty, believes Victoria is weathering the economic storm better than other parts of the country. “We still have a vibrant local housing market that’s better than in most other cities,” she said. “We’re seeing a lot more activity than last fall. There’s optimism in the market, and that translates to transactions.”

Inventory in Victoria is up, particularly under the $500,000 price point. “The supply of inventory has continued its upward climb early this year, so buyers will have lots of choice this spring. Low interest rates and the departure of winter weather mean a return of consumer confidence.”

While prices in other housing segments have increased this year, Geurts has noticed a decrease in condominium prices. “An interesting trend is that many new condo units are being reconfigured to target first time buyers. We’re also seeing things like cash bonuses and auctions for buyers, so sellers are getting creative.”

Victoria is still seeing multiple offers for homes, which is unusual in a buyer’s market, Geurts said.

Royal LePage’s quarterly House Price Survey shows the following annual change of prices for key housing segments in select Vancouver markets:

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National

Consistent with current economic trends, Canadian residential real estate prices declined during the first quarter, according to a quarterly House Price Survey released today by Royal LePage Real Estate Services Ltd. As the market correction unfolds, year-over-year home prices were lower, as was expected. Increased buyer activity at the end of March suggests that spring will bring its typical increase in unit sales activity as buyers target summer moves.

Regional disparities in quarterly housing prices showed markets in Atlantic Canada outperforming other areas of the country as hardy local economies spurred house price growth across the three housing types surveyed.

Markets in central Quebec and eastern Ontario held steady with areas of modest growth and limited declines. In the balance of Ontario, and in particular the Greater Toronto Area, prices retreated from the record levels set in the first quarter of 2008, with most trading areas showing mid to low single digit declines. With the exception of Manitoba, western provinces saw significant changes as the rapid run-up in prices experienced earlier in the decade gave way to double-digit declines in most regions. As market corrections in B.C. and Alberta were underway well ahead of the full impact of the current economic crisis, it is suggested that these areas may be first in Canada to stabilize.

“We expected a sharper decline in house prices across Canadian markets during the first quarter,” said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services Ltd. With economic hardship dominating our global consciousness, it was predictable that dwindling consumer confidence would continue to drive prices lower. But markets were relatively resilient during the period. Soper continued, “Canadians in most regions should not expect the prices of their homes to begin appreciating again until the overall economy begins to stabilize, likely in the first half of 2010.”

The report shows that the average price of a two storey home in Canada declined 6.5% to $379,636 compared to the same quarter last year. In Vancouver, the average price declined 12.6% year-over-year to $828,750 while in St. John’s prices climbed 15.6% to $265,000. With consumer confidence bolstered following investments by Vale Inco NL and Hebron, Soper commented: “Using house price change as a gauge, Newfoundland is Canada’s sole remaining seller’s market.”

Moderate growth occurred for detached bungalows in Montreal (up 2%) and Ottawa (up 1.9%), while Toronto saw a decline of 6.3% compared to the same period in 2008. Prices in the prairies and in western cities declined with the average price for a detached bungalow down 8.1% in Saskatoon and 11.2% in Edmonton.

The nation’s condominium market waned with the average price of a standard unit dropping 3.4% to $232,877 compared to $241,152 in the first quarter of 2008. Calgary saw a 12.8% drop in average price of condominiums, but declines were less severe in Vancouver (down 5.3%) and in Toronto (down 3.1%). “Condominiums are generally the most affordable housing option, especially in urban centres,” Soper said. “With record low lending rates and new government initiatives aimed at encouraging first-time buyers to enter the market, ownership at the entry level is becoming increasingly accessible.”

Noting recent global efforts to address the economic crisis, including the coordinated response from the world’s leading economies coming out of the G20 meeting and stimulus package announcements at home and in the United States, as well as what appears to be the beginning of equity market recovery, Soper commented, “These glimmers of economic hope are coinciding with a time of year that typically brings renewed interest in the housing market.

Traditional spring trends – increases in open house attendance, calls to brokers and viewing appointments – tell us that potential buyers are stepping off the sidelines and an increase in purchase activity is likely to follow.”

As described by Moishe Alexander, CFC CEO

Normally, “hot spot” isn’t the first phrase that comes to mind when talking about Saskatchewan, Canada. A relocation service company president said he is moving more people to Saskatechwan than ever before. But with most of Canada suffering from devastating job losses, this cold province is becoming exactly that. It’s an asterisk to the entire country when it comes to the economic climate, and Premier Brad Wall is shouting it as loud as he can.
“It’s a great time to come to Saskatchewan,” said Wall, who even called the Toronto Star newspaper to tout his province’s economic success and let Ontarians know there were jobs for the taking.
“For those who are losing their jobs, we need them to know we have thousands of jobs open right now in both the private and public sector,” Wall said. “We have a powerful story to tell, a story of success and that’s something we want to share with those who are struggling.”

Wall’s province is one of the exceptions to the unemployment increases battering provinces across Canada. Saskatchewan’s unemployment rate fell to 4.1 percent in January from 4.2 percent in December, making it the only province recording a decline. In Ontario and the city of Toronto, unemployment rates rose to 7.2 percent and 8.5 percent respectively. To the west, British Columbia shed 68,000 full-time jobs in January.
More Saskatchewan jobs should be on the way. To stave off any possible recession, Wall announced a $500 million infrastructure “booster shot” to help keep the economy strong.
“All across the country, industries are getting quite ill,” Wall said. “We aren’t immune to it. We see some impacts in terms of layoffs and new vehicle purchases slowing off, and so we want to be proactive in staying ahead of the curve.”
On Tuesday, the Conference Board of Canada released a report that said Saskatchewan will likely continue to lead the nation in economic growth in 2009 because of the infrastructure investment and tax reductions.
The province has also been reaping the benefits of an influx from nearby Alberta. When the government in Alberta decided to raise the oil royalty rates, oil exploration and expedition companies decided to move their operations to Saskatchewan in hopes of making more money.
With the province’s growing opportunities, David Montgomery, president of Calgary’s Qwest Haven Relocation Services, said he is moving more people to Saskatchewan each day.
“Alberta has always been the gravy train of oil,” said Montgomery, who is also a former resident of Regina, the capitol and second-largest city in Saskatchewan. “But with the new royalties, oil companies are saying ‘Why stay here and make less when the opportunities right next door are even better?’ Many other companies may start to follow suit.”
Montgomery said people looking to move have said that cheaper land and insurance prices are among the other reasons they are headed to Saskatchewan.“There, government insurance is cheaper than anywhere else in the country and it comes with your license plates,” he said. “With the amount of jobs, cheaper opportunities and great way of life, the government there has made it very attractive to move there.”
That means more business for Wall’s province and more jobs coming to the area.Not that there’s a shortage of jobs. On Tuesday night there were nearly 6,000 private- and public-sector jobs on the web site SaskJob.com A constant stream of revenue from oil production and exports also buoys the economy in the province.
Saskatchewan is the largest producer of oil in Canada and exports more oil to the United States than Kuwait. It is the leader in uranium production and produces a third of the world’s potash.
The province continues to keep ahead of the curve, Wall said, finding ways to diversify its resources and embark on ambitious green projects and new oil projects. The province is working with Montana on a $212 million climate change initiative that would create the first major greenhouse gas storage project in North America. The carbon dioxide from coal-fueled power plants would be stored in the ground in Montana and later be withdrawn for use in oil production.
Wall also said what may be the largest discovery of sweet, light crude oil in the southeast part of the province means it could have even more oil to work with. The Bakken Formation could potentially have 413 billion barrels of oil, according to the U.S. Geological Survey. That would be another huge untapped revenue gold mine.
Despite the growth of nearly all sectors across the board, Wall cautioned that it is possible his province may see economic stress, just later in the game than other places.
“We need to be circumspect and prudent about promoting our province,” he said. “We are not immune; we do see the impacts. It isn’t some sort of panacea or answer to economic questions that don’t exist elsewhere. We are a bit of an asterisk that says there is some stress, but it’s relatively calm here.”
Wall encouraged people not to count out a move to the province based on stereotypes that it is “only winter here,” and “all of the land is just rolling hills.”
“‘It’s a beautiful, big place where life is great and right now there’s also opportunity,” he said. “I’m very, very biased, but I can’t imagine a place I’d rather be, especially with what’s going on economically around the world.”

http://www.reginainformation.com/2009/03/saskatchewan-get-top-billing-on-cnn.html

reviewed by Moishe Alexander