Low numbers don’t tell complete story

For those looking at indications of how tough the current economic times are, they need look no further than the statistics for housing starts. But, statistics can be deceiving.
Provincial home starts declined to 14,100 units, seasonally adjusted at annual rates, from 19,900 units in December 2008. At the national level, housing starts moved lower in January to 153,500 units from 172,200 units (SAAR) in December.
Here in Prince George the numbers are very dramatic as housing starts in January dropped 76.5 per cent from January 2008.
According to the Canadian Housing and Mortgage Corporation, workers started building four new single-family houses in January of this year, compared to 17 in January of 2008.
There were no starts of multiple family dwellings in Prince George in January, Prince George and Chilliwack being the only major cities in B.C. without a multiple family dwelling residence start in January.
However, the numbers are only a snapshot comparing one month against another and shouldn’t be viewed as a comprehensive analysis of the sector, says Allan Creuzot, president of the Canadian Home Builders Association of B.C.
The market has definitely slowed, he says, but there are several factors at play.
“People are a little cautious with the economy,” he said Tuesday. “But one of the things you have to look in December and January we’ve had -30 degree temperatures and three feet of snow. Weather conditions do play a bit of a factor.”
It’s more cost-effective to start building a house when the weather is better and the builders don’t have to deal with frozen ground and/or keeping a shelled-in house heated.
Another factor for home-builders is the real estate market. If a contractor has built some spec homes that haven’t sold, they will likely wait until they do before starting new construction.
He says looking at statistics for a six-month or one-year period paint a more accurate picture.
And, for Prince George, the housing start numbers in 2005 and 2006 were extremely high. The figures from 2007 and 2008 are probably more indicative of the actual market.
“We’re in for a bit of bumpy road,” said Creuzot, added he’s confident the market will pick up in the spring.
The Prince George area is well positioned to return to the heady house construction days of 2005 and 2006, he said, and he is confident the industry will stay strong.