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New housing starts in Victoria. credit: Gabriel Teo
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Kelowna, Victoria, and Vancouver are all expected to experience a decline in housing starts, following record highs and lows.
In Kelowna, 2018 saw housing starts down 29% from 2017 thanks to declines in both multi-family and single-detached construction projects. Population growth in the region has slowed and resale inventory is higher than in recent years, the combination of which is anticipated to further moderate annual housing starts in the region. “Slowing interprovincial migration into the Kelowna area can be partially explained by a recovery in the pace of economic growth in the Prairie provinces,” says CMHC’s Taylor Pardy, “creating greater competition for labour and drawing individuals back to Alberta, in particular.”
In Victoria, housing starts in 2018 were the highest the region has seen since 1976, but increasing inventory levels are expected to temper recent highs.
“The inventory of new homes on the high end of the price spectrum has trended up from a low point and is relatively more abundant than one year ago,” says CMHC’s Braden Batch. “The rate of price growth has retreated from recent double-digits, bringing growth to annual appreciation in the single digits. With price growth moderating, it is expected that production on higher cost projects will also moderate.”
In Vancouver, housing starts are expected to decline over the next two years due to a record number of new homes currently under construction and an ongoing decrease in resale home prices. “Completions of new units are expected to continue running ahead of household formation into 2019, necessitating a pullback in new construction as projected inventories of unsold units rise,” says CMHC’s Eric Bond. “New condominium apartment developments may face longer sales periods over the forecast horizon as consumers have more options in a rising inventory environment.”
This market outlook also covers the resale and rental markets. Read more in “CMHC Outlook” in the Spring 2019 edition of Input. Download Spring 2019
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