New data released show home construction down
Roofers shingle a new home. — Associated Press file photo
The provincial branch of the Canadian Home Builders’ Association is meeting this week to discuss the economic impact of the industry, as Statistics Canada releases data showing a 25 per cent drop in the value of residential construction in the past year.
The association is hosting its annual housing forum Wednesday at the Airport Comfort Inn on Wednesday, half a day of presentations on the residential construction industry’s role in the provincial economy.
Data released Friday by the association note that new housing starts hit 3,885 last year — 2,153 in the St. John’s area — which, according to the association, translates to 3,100 jobs in construction, renovation and related fields, and $719 million in wages.
“The starts and the jobs and the wages and everything, it should establish the industry as a pretty significant contributor to the overall economy,” said Victoria Belbin, the provincial association’s CEO. “When we show these numbers, people will say, ‘Huh. Really?’ They don’t look at the residential construction industry in our economy. It’s all about the big side, the commercial construction and industrial construction. But obviously, with such a growing economy, it’s the housing industry that really is also a major contributor, because people need to have places to live. As well as we see the economy changing, people also change their housing.”
Meanwhile, Statistics Canada on Monday released seasonally adjusted data on the value of building permits across the country, showing an overall 8.9 per cent drop across the country in the value of residential permits issued, from just under $4 billion in March 2012 to $3.6 billion in March this year.
In Newfoundland and Labrador, the $50.7 million in building permits issued in March was a healthy boost over February’s $34.3 million, but a 24.9 per cent drop from the $67.5 million in building permits issued in March 2012.
Chris Janes, senior market analyst for the Canada Mortgage and Housing Corp. (CMHC) — who will speak at the housing forum Wednesday about housing trends — said while the number of single-detached homes has been more or less flat, there’s been a steep drop in multiple-family units started.
“In particular condos — we’ve had a lot less condo starts so far this year compared with the first three months of 2012,” he said.
“If we look at the single-detached segment, which is the key driver of this market and what we really focus on at CMHC in terms of trends, that has been flat year-to-date, so that’s a better indicator of the health of the market. The multiple-family, the multiples segment is extremely volatile.”
The outlook for multiples this year isn’t rosy, said Janes.
“Last year, we really had an overbuild situation in condominiums, and a lot of the builders realize that now. There’s a pretty large supply right now of brand-new condos for sale on the market, either completed or pre-sale, and they’re not moving very quickly, so that market right now is fairly saturated.”