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Housing sector picks up slowly



Last Updated: August 11, 2010 6:09pm

The London area housing market continued its gradual recovery in July with 188 new home starts, including 148 single-family homes.

The Canada Mortgage and Housing Corporation (CMHC) reports last month’s starts were 44% higher than July 2009 when the market was still mired in the recession.

Single-family homes have led the recovery, up 121% so far this year.

CMHC analyst David Lan said much of the residential activity seems to be clustered around the hospitals.

“Continued employment growth in the health care sector is supporting demand for detached homes close to hospitals in the city,” said Lan.

But Lan said apartment and townhouse starts are lagging this year and are not likely to recover soon with the London rental vacancy rate around 5%.

London’s strength in single-family home starts is bucking the provincial and national trends.

Across Canada the estimated annual rate of housing starts across the country slipped to 1.6% to 189,200 last month.

The CMHC blamed the decline on a drop in urban single starts and a reduction in rural starts.

In Ontario the annualized rate fell for the second consecutive month, to 51,100 house starts, down from a revised 52,500 units in June. Most of the provincial decrease was also blamed on the single detached home sector while multi-family home construction, which includes semi detached, row and apartment dwellings edged up.

For the year, Ontario new home construction in urban areas is running 31% above levels for the same period one year ago.

“A slower pace of economic growth across the province, competing supply pressures from the resale market and a smaller pool of first time buyers suggests construction activity will ease during the second half of 2010,” said Ted Tsiakopoulos, CMHC’s regional economist.