Wednesday, August 12, 2009

Vancouver - July 2009 Housing Starts

The Canada Mortgage and Housing Corporation released housing starts yesterday for the month of July and it was in the news across the nation. Vancouver saw a measly 516 housing starts during the month of July.



This does not bode well for construction employment. Many of the nearly 20,000 units under construction currently will complete in the next 6 months and I expect the number of unemployed construction workers will skyrocket as there are very few projects to pick up the excess labour.

7 comments:

M- said...

Ouch...

Van Housing Blogger said...

Not to mention the end of Olympic related construction projects, all of the municipally rushed construction projects (cf Olympics) etc.

In January, I predicted a 10% UE rate for BC by June 2010. I think we'll hit it.

mohican said...

Venue construction has already wound down, the Canada Line is virtually complete, and the Golden Ears Bridge is done. The other highway upgrades are still progressing quickly and will come to completion within the next 6 months. Residential construction is still the biggest employer in construction though and there are not enough projects to pick up all of the employees.

This upcoming winter will be VERY bad for unemployment in BC. I expect there will be a lot of unemployed and underemployed construction workers, mortgage brokers, and real estate agents. In construction, unskilled labour and apprentices will get cut first. I expect foreclosures to really start to take off in BC by Q1 2010.

first_time_buyer said...

"This upcoming winter will be VERY bad for unemployment in BC. I expect there will be a lot of unemployed and underemployed construction workers, mortgage brokers, and real estate agents. In construction, unskilled labour and apprentices will get cut first. I expect foreclosures to really start to take off in BC by Q1 2010."

Like I said earlier, with minority govt run by Harper at helm, there is no guarantee they wont come up with another bout of "quantitative easing" to pump the real estate and that may continue the current unimaginable-in-Jan bidding wars at full throttle. This in turn may start the construction frenzy like seen in past few years. In long run, the result is inevitable, but in something as short as next 6 months, I am not willing to bet my dime.

david said...

FTB,

The government has been firing everything they have at keeping housing prices afloat and it has done pretty well so far. However this has not done anything to get major projects started. Real estate has been smoking hot in the past few months but the number of starts has decrease without signs of slowing through the entire summer. My guess would be that developers know this is only temporary and are not willing to bet that the market will be this hot in a couple of years when units started now will be completed.

jesse said...

ftb, money floating into unproductive capital assets like real estate is really not what the government wants to happen. They want the money put towards productive investments but nobody wants to pull the trigger.

Ignoring asset bubbles is what got the US and UK into their respective messes in the first place. Canada is slowly creeping towards this in terms of debt versus GDP.

first_time_buyer said...

"They want the money put towards productive investments"

You are talking of ideal world that does not exist, as frugality is the new word. meanwhile, they will do something that comes easy, that is to supporting real estate through CMHC as long as they can. Maybe that could start another construction frenzy and which in turn can give the production boost.