Housing starts rebound

New home construction in Kamloops rebounded during the first quarter of 2010, a strong indicator the recession is history.

Housing starts have risen 88 per cent over this same period, consistent with upswings reported in Kelowna and Penticton. In April alone there were 26 new-home starts in the city compared to 18 last April.

“Keep in mind you’re comparing it to very low levels last year,” said Paul Fabri, CMHC market analyst.

Even so, the Kamloops market weathered the recession better than other Interior centres, he noted.

“The low point last year wasn’t as low as Kamloops has recorded in past new-housing downturns,” he said. “Kamloops did weather it better than most, especially Kelowna.”

Kamloops wasn’t oversupplied with new construction of apartment/condominiums in the same way Kelowna was with its recreational and second-home market. That sector is more vulnerable than others to economic shifts.

There were 211 housing starts, including single-family and multiple-family homes, in Kamloops in the first quarter of the year compared to 112 in the first quarter of 2009.

Nationally, April housing starts edged up to 201,700 units, seasonally adjusted at annual rates (SAAR), from 199,200 units in March. In urban B.C., the seasonally adjusted annual rate of housing starts rose to 25,600 units (SAAR) in April from (22,000) units SAAR the previous month.

Several factors are helping to invigorate the new-homes market overall, he noted. Interest rates remain relatively low, despite the recent increase, and construction costs are lower now than at any time in the last five years. That’s due to a correction in the market as a result of the downturn.

There is an anticipatory factor helping to drive the current pace as well, Fabri said.

“I think some people are building now in anticipation of higher interest rates later this year, and the same goes for the HST.”

Some local builders are hurrying to get their products on the market before the HST takes effect July 1, said Dick Pemberton, president of Kamloops and District Real Estate Association. However, most properties in Kamloops will be priced below the $525,000 threshold for rebates, he noted.

Sales were down marginally in April but have increased 33 per cent overall since last year.

“Our agents are pretty busy right now,” he said.

myouds@kamloopsnews.ca

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