Friday, March 28, 2008

February 2008 Vancouver CMA CMHC Data

February was a busy month for developers in the Vancouver area. They started construction on 2,446 new homes and completed only 1,484. This pushed the number of new homes under construction in the Vancouver Census Metro Area to a new record high of 26,560.

The number of completed and unabsorbed homes continues to rise in the Fraser Valley markets of Langley, Surrey, Abbotsford, Maple Ridge and Pitt Meadows. The total number of unabsorbed new homes rose to 1,384 which is 24% higher than last year.

With the number of new homes that will complete soon and the number of unabsorbed units rising, one wonders why developers are starting construction on so many projects.


Craig said...

So 26,500 new homes being built. About 38,000 total homes -- old and new -- sold last year.

Listings up. Sales slowing.


Warren said...

Best place on earth!

Anonymous said...

Evey new unit they build lowers the price of what ever place I end up buying, so let them build!

seeker said...

Underbuilding = pentup demand then turns to overbuilding. Got to be a glut coming...

Housing starts defy expectations, rising 15.4%
Latest available: February 2008
Release date: March 10, 2008

The gains were led by British Columbia where starts rose a phenomenal 45.2% reflecting strength in condominium construction in Vancouver.,,cid-10690_,00.html

oh please said...

I think it's because there's no way to predict the future. Let's say you're a builder and in 2004 you see the blip in the market and you stop building. Guess what - that's all it was, a blip, and you've just given up a huge amount of income. You have to keep going until it's clear there's no market and hope you have the resources to survive the inevitable downturn.

patriotz said...

I agree, the builders all know that the party can't go on forever, but they all hope they can stay "ahead of the curve" and come out in the black. Some will, some won't.

macho slob said...

The few remaining spec house builders who have survived 81, are glad that they have pulled in their horns over the last couple of years.

Unfortunately, some of the upstarts are now starting to panic as their recently completed houses that were built with peak material and labour cost are not selling.

Unlike resales that have appreciated for several years, builders have to work on thin margins and cannot afford to let these houses sit empty, and are starting to cut prices.

All those desperate presale flippers trying to unload their assignments on craigslist is another indication that the party is ending.

Tony Danza said...

One of my builder acquaintances has just commenced building on four spec houses on the west side. He was letting the lots sit for the last 18 months thinking he could wait out the labour crunch and material costs to boost his margin. He seems much more stressed out than usual and wishes he would have bit the bullet a year ago as labour costs have not abated and actually will eat all the margin and more gained from plummeting material costs.

BTW the builder used to be a University prof who "retired" to build specs using the equity from his home in Point Grey. Disaster.

fastso said...

Did your builder friend teach business or econ in UBC?

I believe when Labour and Material costs goes down, so does housing prices. Sort of like robbing Pual to pay Mary?

Can you ask him to explain further on the logic behind his decision to wait? Thanks

patriotz said...

I believe when Labour and Material costs goes down, so does housing prices

They often do, but it's not a causal relationship in that direction. Housing prices don't go up and down because labour and materials gets more or less expensive. Rather labour and material costs are driven by the number of housing starts, which is of course driven by the price of housing.

Lumber prices have fallen substantially, for example, due to the dropoff in demand from south of the border. But local house prices haven't gone down. Yet.