The pace of new home construction in Ottawa slowed in September, in line with the national trend.
New home starts dipped by over 13 per cent in September to 420, compared to 484 in the same month last year. Both single-detached and multiple starts were lower, but developers are showing a preference for multi-family developments as the price of single-detached homes continues to escalate beyond the reach of many buyers.
Despite the September dip, home starts so far this year have been noticeably stronger than 2005. Total starts have reached 4,299 units since the beginning of the year, up 18 per cent over the first nine months of 2005.
Builders took advantage of a warm winter to get an early start on the 2006 season.
"The home construction decline observed in the single-detached home segment is continuing," says Pascal-Yvan Pelletier, Ottawa market analyst for Canada Mortgage and Housing. "Higher construction costs and new detached home prices are prompting developers and consumers to opt for dwellings in higher-density projects."
On a year-to-date basis, the strongest increase in starts has been in the former municipality of Gloucester, where starts are up 45 per cent compared to 2005. Stars are up 42 per cent in the old city of Ottawa, while Kanata starts are up 29 per cent.
Nationally, housing starts slowed in September to an annual rate of 211,300 as builders cut back on multi-unit construction.
The slower pace of new home construction failed to meet analysts' expectations. They'd predicted starts of 218,000 last month, an increase from August levels.
"The decline in housing starts is attributable to a decline in the multiple starts, which reached their lowest level since July 2004. For a second consecutive month, single-detached starts edged higher," says Bob Dugan, chief economist at CMHC's market analysis centre. "The lower level of housing starts in recent months is consistent with our forecast for a gradual easing in the pace of new home construction."
The seasonally adjusted annual rate of urban starts decreased 2.9 per cent to 176,900 units in September. Urban multiple starts declined 7.0 per cent to 81,200 units, while singles inched up 0.8 per cent to 95,700 units.
