Market Shift: Housing starts down

Courtesy of The Leader Post. 
  Housing starts in Regina, Saskatoon and most other areas of Saskatchewan are down substantially in the first three quarters of this year.

Data released Thursday by the Canada Mortgage and Housing Corp. indicates housing starts in the metropolitan Regina area were down 39.4 per cent in the January to September period this year compared to the same period last year.

Starts in Saskatoon were also way down, by 62.8 per cent, in the same nine-month comparison.

Paul Caton, a senior market analyst with CMHC, said the reduction has occurred as builders seek to reduce inventories of unsold homes.

But "the stage is being set for a recovery in 2010,'' as inventories of unsold homes decrease, Caton said.

A similar analysis -- but with respect to the resell market -- was provided Thursday by Mike Duggleby, the manager of Royal LePage Regina Realty.

A price survey by Royal LePage indicated that the resale price of homes in Regina was down by 3.6 per cent in the third quarter (July-August-September) of 2009, compared with the same period last year.

An oversupply of houses on the market had contributed to the downward trend in selling prices, Duggleby said.

But that oversupply of houses on the market has been whittled down and prices are starting to move upwards again, Duggleby said.

"We're sitting on a balanced market whereas an oversupply created a buyer's market over the last year and a half,'' Duggleby said.

Caton said demand for new homes has remained strong, which means the oversupply of properties on the market has been declining.

While demand has remained strong this year, it is still not comparable to "the frenzy of demand" that occurred when the housing market was red hot in 2007 and 2008, Caton said.

Housing starts in the future will reflect the strong but not quite frenzied demand for homes that now exists, Caton said. Construction should increase next year, he said.

The average price of new homes has gone up by about five per cent this year and the province's economy has remained strong, Caton said.

The data released Wednesday indicates that housing starts have been down in most areas except for Estevan and Prince Albert which have experienced increases. In Yorkton, the 79 housing starts in the first nine months of 2009 is exactly equal to the 79 starts in the same period last year.

Single-family detached housing starts were down in Regina to 411 starts in the first nine months of the year compared to 741 during the same period last year. Multiple-family (apartments, townhouses) starts were also down, to 252 starts from 353 last year.

Single-family starts in Saskatoon went down, to 691 starts in the first nine months this year from 1,076 in the same period last year. There were only 89 multiple-family starts in Saskatoon in the first nine months of this year, which was way down from 1,019 last year.

Housing starts in both Regina and Saskatoon also declined in a comparison of September this year and September of last year.
Tyler Frederick

Tyler Frederick

CENTURY 21 Fusion
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