Monday, January 15, 2007

Surrey is 2006 Home Construction Capital

I thought this article in the Surrey Leader was interesting as it highlights the fact that the suburbs are where a lot of the action is in this housing boom. I live and work in the Fraser Valley so I can attest to the frenetic pace of growth and the continual traffic nightmares. We have very little transit and a lot of new residents putting a lot of strain on the roads and other public facilities.

The average price of a detached home in Surrey.
12/2001: $251,224
12/2003: $301,078
12/2005: $389,682
12/2006: $469,029
12/2007: $???,??? (my guess - $431,000)
12/2008: $???,??? (my guess - $385,000)
By Jeff Nagel
Black Press
Jan 12 2007

Surrey became the new home construction capital of the Lower Mainland in 2006. Overall housing starts across the Greater Vancouver Regional District dropped two per cent last year, but Surrey recorded a 20 per cent increase to nearly 4,600 units, according to the Canada Mortgage and Housing Corporation.

That put it ahead of the construction pace in Vancouver, where the number of new starts fell 18 per cent to 3,426. Richmond moved into third place with 2,094 new units started, an 18 per cent gain paced by strong growth in multi-family units. Burnaby, where new construction was cut nearly in half to 1,606 mostly multi-family units, dropped to fourth.

Condo and other multi-family construction surged in places like Coquitlam, Maple Ridge and Pitt Meadows. “Densification is going to be an issue and people better get used to it,” said Greater Vancouver Home Builders Association CEO Peter Simpson. “We have to put more people in a more constrained space.” He predicts builders will increasingly offer developments that let residents live, work and play without travelling far. Coquitlam saw 976 multi-family units started last year, up from 260 in 2005, while Maple Ridge started 528 units, up from 111 the previous year.

Surrey continued to lead the GVRD in single-family house construction, with 2,247 starts accounting for nearly half the region’s total. Simpson expects past political opposition to growth from some city councils, notably in Delta, will moderate this year. “Mayor Lois Jackson has to start walking the talk,” he said, noting plans to build several hundred new units in Delsom Estates there may mark a turning point. The industry ended the year with construction starts down a sharp 26 per cent in December. But Simpson called that a blip due to extreme weather late in the year. “We had horrendous weather conditions,” he said. “We went through winds and floods and rain and snow. I think the only thing missing were locusts.” He predicted more balanced market in 2007 will give builders a chance to catch up on some work.

The number of workers employed in the Lower Mainland’s construction industry hit a new all-time high of 108,500 in December. Construction employment climbed 21.8 per cent in the Abbotsford area and 6.9 per cent in Greater Vancouver, according to the Vancouver Regional Construction Association. The sector marked its third straight annual increase in 2006.


mohican said...

My guesses on home prices are just that - guesses. My hunch is that this year we will witness a large increase in housing inventory and this will lead to small price decreases at first (-6% to 8% in 2007) and then bigger decreases (-10% to -12%)the following two years, bringing us back down to approximately 2003/2004 nominal price levels.

This is absolutely and purely speculation and its just for fun so I can go back and laugh at myself for trying to tell the future!

Uncertain Buyer said...

I am in Cloverdale and there is a lot of new construction and a lot that is still for sale.