Housing starts jumped 17 per cent last year in Metro Vancouver as buyer interest improved and builders responded by launching new projects.
The 17,867 new starts across the region was about 2,600 higher than 2010 and more than twice as many as in 2009, when the construction industry swooned amid the global financial crisis.
“The bounce back has been very dramatic,” Greater Vancouver Home Builders’ Association president and CEO Peter Simpson said.
He expects 2012 to be a “steady as she goes year” with out any huge spikes or drops.
Builders are still being cautious, he said, because they have no control over whether interest rates climb or if there’s more global economic turbulence.
Another area of uncertainty remains the dismantling of the harmonized sales tax (HST), which Simpson said he wishes would happen faster than the province’s target of April 2013.
Buyers of more expensive homes priced above the HST rebate threshold can avoid the seven per cent provincial tax portion if they wait until the HST is repealed and B.C. returns to a provincial sales tax along with the federal GST.
Simpson said that’s also prompting some home owners to delay major renovations.
“It’s still a concern,” he said of the HST, but added it no longer seems to be the first question prospective buyers ask.
“People buying homes realize if they wait the savings in HST could conceivably be offset by higher housing prices and higher interest rates down the road.”
Almost 80 per cent of the new units started last year were in multi-family developments, up from 70 per cent in 2010.
“Multi-family starts fueled growth in new home construction in 2011,” said Robyn Adamache, senior market analyst for the Canada Mortgage and Housing Corp.
In contrast, just 3,686 detached houses were started last year down, 19 per cent from more than 4,500 in 2010.
Surrey’s single detached house starts fell to 1,091 from more than 1,900 but the drop was more than offset by increased multi-family construction.
“Solid market trends and a more positive economic outlook compared to a year ago have provided the impetus for developers to undertake larger projects,” Adamache said.
Richmond and Surrey both saw 1,000 more multi-family units started in 2011 than the previous year.
Richmond saw the biggest growth surge, with starts up 86 per cent, followed by North Vancouver with a gain of 81 per cent and Langley up 41 per cent.
The most starts in the region were recorded in Surrey and Vancouver – both had just over 3,800 starts – followed by Richmond at 2,636, Burnaby at 1,611 and Coquitlam at 1,442.
Further east in the Fraser Valley, Abbotsford saw a four per cent increase in starts to 537.