house resale price declined in June
Local housing starts, resales both higher at mid-point of year.
July 9, 2004 - New home construction in Ottawa declined in June, while the resale market enjoyed another month of robust activity, according to separate reports Friday.
Canada Mortgage and Housing Corp. reported that construction began on 593 new housing units in June. That was down 13 per cent from the 681 starts recorded in June of 2003 and a by 7.3 per cent from 640 starts in May.
Driving the decline was fewer starts in the more affordable end of the market―multiple-type units such as condos and rowhousing.
The number of multiple starts in June, 242, was a drop of 33 per cent from a year ago and of 4.3 per cent from May.
Contrary to the typical trend for a market that is beginning to soften, starts of costlier single-family homes were up for the second month in a row in June. Singles starts totalled 351, up by 10 per cent from a year ago. However, that was a decline from May's 387.
"An anticipated future rise in mortgage rates is likely convincing many consumers to jump into the new home market now instead of later," Christian Douchant, CMHC's senior market analyst for Ottawa, said in the report.
Despite the overall decline in starts in June, Mr. Douchant emphasized that the number of starts on the year to date represent an increase of eight per cent from the same period a year ago.
Construction has begun on 3,144 new housing units so far this year, compared with 2,918 in the same period a year ago.
CMHC expects 6,200 starts in total for this year. In 2003, the total was 6,381, an 18-per-cent drop from the record 7,796 starts recorded in 2002.
Single-family starts in the first half of this year were up by four per cent, to 1,391, while multiple starts were up by 11 per cent, to 1,753.
Earlier this week, the latest building permit data from Statistics Canada suggested the level of construction activity seen in the first half of the year isn't likely to last.
The value of residential building permits taken out in May by area builders dropped by 16.6 per cent from April, to $81.7 million. Declines were seen in both the multiples and singles segments.
In the January-to-May period, $451.2 million worth of residential building permits have been issued in Ottawa, up by 5.7 per cent from the first five months of 2003. Driving that increase has been the cheaper end of the market, with multiples up by 21.5 per cent to $208.69 million. A more balanced market has eroded demand for costlier single-family homes and singles permits are down by five per cent on the year to date, to $242.5 million.
RESALE MARKET ROBUST IN JUNE
In a separate report Friday, the Ottawa Real Estate Board reported that activity remained brisk at the other end of the housing market―resales.
According to OREB, 1,433 residential units sold in Ottawa last month through the Multiple Listing Service used by most realtors.
That total was an increase of 9.3 per cent from June 2003. However, it was a decline of 12.7 per cent from a record-setting May.
Resales for the first half of the year totalled 7,494, up 10.5 per cent from the 6,781 sales recorded in the first half of 2003.
"With the first half of our year completed, our numbers are strong," OREB president Glenda Brindle said in the report. "A strong and balanced market is what we are experiencing."
The average selling price of the properties sold in June was $240,594, a slight decline from $242,166 in May.