Posted Jul 13, 2011, 12:30 AM
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Join Date: Mar 2011
Location: Calgary
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From todays CH...
Demand up for apartment construction
Slow growth, flat wages blamed for trend
By BRUCE ERSKINE Business Reporter
Tue, Jul 12 - 4:54 AM
This complex under construction at the corner of Almon and Gladstone streets will have 93 apartments and 20,000 square feet of ground-floor commercial space.(Christian Laforce / Staff)
SLOW ECONOMIC growth and flat wages are driving multiple housing starts in Halifax, says Matthew Gilmore, senior regional market analyst with Canada Mortgage and Housing Corp.
"Wages aren’t keeping up with inflation," he said in an interview Monday. "It doesn’t lend itself to home ownership."
According to preliminary data released Monday by CMHC, multiple housing starts in Halifax last month were more than double what they were in June 2010.
"It’s almost exclusively in rental apartments," said Gilmore. "We’re seeing well above average apartment construction."
There were 202 housing starts in Halifax in June, including 110 multiple starts and 92 single starts, CMHC said.
That compared to 125 housing starts in June 2010, which included 34 multiple starts and 91 single starts.
Gilmore said the trend to apartments has been evident for the past three years and is a reflection of economic conditions.
"The new trend is reduced demand for single, detached construction."
Gilmore said the trend to rentals began with the global economic downturn and has persisted with the low rate of full-time employment growth in Halifax, which he pegged at one per cent, compared to six per cent part-time job growth.
"There is a high demand for lower priced units," he said, including semi-detached and row housing.
Gilmore said Halifax’s relatively transient population, with an annual 20 per cent turnover, is also driving demand for rental housing.
"People are moving around," he said. "That lends itself to rental demand."
Gilmore said existing home prices in Halifax, which average $260,000 and are up three per cent from last year, aren’t a bubble waiting to burst as in other, more volatile Canadian markets.
"We wouldn’t characterize it as such," he said. "They’re in line with (market) fundamentals of supply and demand."
CMHC said there were 313 housing starts in Nova Scotia communities with populations of 10,000 or more, including Halifax, in June 2011, up from 258 in June 2010.
In the Atlantic region, there were 1,051 new starts in June 2011, compared to 1,012 units during the same period in 2010.
In urban centres across Canada, total housing starts in June increased to 15,982 from 15,346 in June 2010.
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