According to CMHC Q3 BC Report

Key drivers of housing demand, including employment and incomes, are showing signs of improvement. Housing demand from underlying population growth remains supportive of more housing starts than the numbers for the first half of the year suggest. Downside risks to the forecast remain, even though the starts forecast for the current year has been revised down. Home construction will pick up later in 2009 and in 2010 as a result of improved economic and job growth, low mortgage interest rates and population growth.

Labor market fundamentals are improving. Employment picked up in April and May, following seven months of declines and incomes are growing. The number of fulltime jobs increased in June, despite a modest drop in total employment compared to May. The labor force is growing at a faster pace than employment, pushing the unemployment rate higher. People returning to the workforce are a positive indicator for future housing demand.

The province’s population growth will wane slightly this year due to lower, but still high, net immigration. An increase in international migration will offset lower levels of interprovincial migration. Vancouver is the destination for most people moving to the province from other countries.

Prices will trend higher during the second half of the year as resale market conditions improve. The gap between new home prices and resale home prices will persist, dampening demand for new homes and reducing housing starts this year.

Expect an increase in single detached home starts in 2010 as homeownership demand picks up. Lower land prices will spur homebuilders to build more single-detached homes. Levels will be tempered by moderate migration and high levels of unoccupied new units in some markets such as Kelowna.

British Columbia will have fewer large multiple-unit projects and instead developers will focus on more phased, smaller multiple unit projects. Lower levels of multiple-unit starts will slow the supply of new apartment condominiums coming onto the market. More starts are projected in 2010 as homebuyers look to newly built homes to meet their housing needs.

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BC_2009_Q03.pdf	1.13 MB

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