Building slump part of natural cycle - city
Published Thursday December 9th, 2010
D1
By STEPHEN LLEWELLYN
llewellyn.stephen@dailygleaner.com
As soon as this year's provincial election campaign started talking about big deficits, budget restraint and cutting the civil service, Fredericton's housing construction market started to slow down, says Eldon Toner, president of the Greater Fredericton Homebuilders' Association.
"Most people's prognosis of the situation is that it is because of the election here in the city," he said.
"There were unknowns in all of the platforms, especially the new Conservative government.
"They are going to do some cutting on the civil service. It's a civil servants' town we have here."
Toner, a veteran builder who operates E and R Toner Renovations Ltd., said he isn't attacking the government, but the situation has created a lot of uncertainty.
"As soon as the election was called and all the platforms started coming out, that's when we felt the economy here in Fredericton was just at a standstill," he said.
"I know guys with nine, 10, 12 houses for sale, new houses."
New figures for Canada Mortgage and Housing Corp. seem to support Toner's perception.
In Fredericton, there were 40 new single family homes starts in November compared to 47 in 2009, a decrease of 14.9 per cent, said CMHC.
The number of multiple residential construction projects in the capital was four compared to 10 in November last year, a drop of 60 per cent.
For the year to date, Fredericton has 355 new singles, compared to 375 in 2009, a drop of 5.3 per cent. Multiples were 311 versus 334 last year, which is down 6.9 per cent.
Residential construction in Fredericton for the year to date is 666 units compared to 709 in 2009, down 6.1 per cent, said CMHC.
"My personal experience is that building is down," said Toner.
"There are still people building, but there are quite a few new products for sale."
Toner said 2007, the year before the recession, was an excellent year in home construction in the capital and it has been gradually decreasing since then.
He said he's seeing a lot of renovation work and that's the trend.
"I've been at this for 28 years and when the economy goes down people instead of selling their house ... they will just fix up the house they've got," he said.
Alex Forbes, assistant director of development services in Fredericton, said the city measures housing differently from CMHC, but its figures are also down.
The city statistics are based on issuing building permits while CMHC counts units that have started.
"From the end of November last year to the end of November this year, we're down 10 per cent," Forbes said about overall residential construction.
The city is down 25 per cent in single family dwellings, he said.
"That may look significant, but that is a relatively small number of houses," said Forbes.
He also said the drop is the trend across the country.
"We are no different than anywhere else," said Forbes.
"The market is cooling a little bit and there are all kinds of reasons for that.
"Markets go up and markets go down, and we look at this as a natural part of the cycle."
The construction of new homes was down across New Brunswick in November compared to the same month last year, according to CMHC.
During the month of November there were a total of 211 starts recorded in the province. There were 249 starts for the same period in 2009, a drop of 15.3 per cent.
There were 111 single starts in provincial urban centres with a population of 50,000 or more this year. Last year there were 138 units, a drop of 19.6 per cent.
Multiple starts in main provincial urban centres were also lower in November, with a 10 per cent decline to 100 units.
"The year-over-year decline in total starts for the month of November was mainly the result of fewer single-detached starts in both Fredericton and Saint John," said Claude Gautreau, CMHC's senior market analyst for New Brunswick, in a release.
On a year-to-date basis in New Brunswick, multiple starts are up 32 per cent to 1,550 units.
"Year-to-date multiple starts, particularly in the greater-Moncton area, continue to bolster total residential construction activity in New Brunswick," said Gautreau.
Moncton had 39 single family residential starts in November compared to 38 for the previous year, an increase of 2.6 per cent.
The hub city had 94 multiple starts versus 83 in 2009, an increase of 13.3 per cent.
Saint John had 25 single starts in November, compared to 40 last year, a drop of 37 per cent. The port city had two multiples versus 14 last year, a decrease of 85.7 per cent.
For the year to date ending in November, Moncton had 1,314 total residential starts compared to 884 in 2009, up 48.6 per cent.
Saint John had 626 starts compared to 625 last year, an increase of 0.2 per cent.
In the Atlantic region, 653 residential units were started in November, compared to 706 units during the same period in 2009, said CMHC.
In urban centres across Canada, housing starts recorded in November were up five per cent to 14,746 units, compared to last year's total of 13,989. Single-detached starts fell 21 per cent to 5,551 units, while multiple starts rose 33 per cent to 9,195 units.