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New-home building to take a dive, CMHC says Prices could fall another 10 per cent this year, according to forecast.

BY DERRICK PENNER, VANCOUVER SUN FEBRUARY 20, 2009

The balancing of supply and demand in British Columbia housing markets should result in a 34-per-cent decline in housing starts and a further 10-per-cent slide in home prices, according to Canada Mortgage and Housing Corp.'s latest forecast.

Canada Mortgage and Housing, in a forecast update issued Thursday, called for new-home starts of 22,800 in 2009 down from 34,321 in 2008.

The national housing agency also estimates the average B.C. home price will hit $407,700 in 2009, down from $454,599 in 2008.

Carol Frketich, Canada Mortgage and Housing's regional economist for B.C., said the slowing economy and rising unemployment will lead to weaker demand for housing over the next two years. "We're going to see consumers rein in their spending, and that includes spending on housing," Frketich said in an interview, and builders will slow down construction on new homes as a result. Frketich said the decline in starts will be below the level of construction that would be expected considering B.C.'s population growth and the rate that new households are formed in the province.

Based on that growth, B.C. would expect to see 30,000 to 32,000 new homes built in 2009 if the economy were stronger. "In a period where you have a strong economy and strong job market, which we did see over the last few years, you build above [population] demand," she said. Frketich added that the forecast numbers are still higher than the 15,000 level experienced during the last correction in B.C.'s real estate markets.

Tsur Somerville, director of the centre for urban economics and real estate at the Sauder School of Business at the University of B.C., said B.C. saw a period between 1994 and about 2001 where housing construction didn't keep up population growth and the increase in household formations. "That's why you can have starts be above household growth for a while and not necessarily be overbuilding," he said. However, B.C. built so many new homes in the last few years he thinks there could be room for housing starts to fall further than the Canada Mortgage and Housing forecast.

Thought Frketich's forecast calls for a 34-per-cent decline, Somerville said "that still seems to be closer to the optimistic end of the range," compared with the level of sales in provincial home-resale markets. "Right now, our starts are not as low as they have been in previous downturns," Somerville said. "Yet our sales numbers are dropping off significantly. That seems to suggest start numbers are going to be low for a while." Housing starts trail housing sales, Peter Simpson, CEO of the Greater Vancouver Home Builders Association, said in an interview. So he is not surprised to see expectations for housing construction decline as slower sales spilled from 2008 into 2009.

Simpson said the drop in housing starts will reduce employment in the sector -- from construction sites to the manufacturing plants that produce building supplies. Frketich expects housing markets to balance out in 2010 with the return of some economic strength and as buyers are attracted to the reduced home prices and lower interest rates on mortgages.

© Copyright (c) The Vancouver Sun

I just finished uploading this House for sale, 9362 162a, Surrey, BC

TYNEHEAD beauty with a view of MOUNT BAKER. Situated on a huge 10,400 sq ft lot this home features brand new kitchen, real hardwood floors, sunken living room with vaulted cielings, 5 bdrms and 4 baths including and unauthorized 1200 SQ ft suite below. Huge high garage. Located in a quiet area but close to all routes and schools.

Please note the change for this upcoming openhouse.

We are proud to announce that this Sunday, February 22, 2009, 2:00 PM to 4:00 PM we will be hosting an Open House at 10780 GUILDFORD Drive , in Guildford Close in Guildford, North Surrey. This is an opportunity to visit this excellent Townhouse for sale in beautiful Guildford.

Please come with any questions you may have. In the meantime you can take a virtual tour of this Guildford Townhouse for sale.

As always please do not hesitate to give me a call at 604.595.2896 if I can answer any questions before the open house, or if you would like to book a private showing.

Scott & Marcella Williams
Money Saver Realty

We are proud to announce that this Sunday, February 22, 2009, 2:00 PM to 4:00 PM we will be hosting an Open House at 14645 60TH Ave in Sullivan Station, Surrey. This is an opportunity to visit this excellent House for sale in beautiful Sullivan Station.

Please come with any questions you may have. In the meantime you can take a virtual tour of this Sullivan Station House for sale.

As always please do not hesitate to give me a call at 604.595.2896 if I can answer any questions before the open house, or if you would like to book a private showing.

Scott & Marcella Williams
Money Saver Realty

Please note the change for this upcoming openhouse.

We are proud to announce that this Saturday, February 21, 2009, 2:00 PM to 4:00 PM we will be hosting an Open House at 14645 60TH Ave in Sullivan Station, Surrey. This is an opportunity to visit this excellent House for sale in beautiful Sullivan Station.

Please come with any questions you may have. In the meantime you can take a virtual tour of this Sullivan Station House for sale.

As always please do not hesitate to give me a call at 604.595.2896 if I can answer any questions before the open house, or if you would like to book a private showing.

Scott & Marcella Williams
Money Saver Realty

I just finished uploading this House for sale, 6870 WALKER Ave, Burnaby South, British Columbia

Custom built new home with 6 bdrms, 6 baths, granite counters, hardwood flrs upstairs and easy care lameneate downstairs, R/I vac, B/I security, phone, internet & cable in every room, lge covered and insulated deck with quick connect gas BBQ hook up, 2 gas F/P's, lots of potential in basement and a attached dble garage PLUS a dble detached garage.

Please note the change for this upcoming openhouse.

We are proud to announce that this Sunday, February 15, 2009, 1:00 PM to 3:00 PM we will be hosting an Open House at 11169 Wallace Drive in Bolivar Hieghts, Surrey. This is an opportunity to visit this excellent House for sale in beautiful Bolivar Hieghts.

Please come with any questions you may have. In the meantime you can take a virtual tour of this Bolivar Hieghts House for sale.

As always please do not hesitate to give me a call at 604.595.2896 if I can answer any questions before the open house, or if you would like to book a private showing.

Scott & Marcella Williams
Money Saver Realty

I just sold this Condo at 114 13475 96TH Ave, North Surrey, British Columbia .

View this recently sold Condo or see all my home sales

New Listings: 66

Price Changes: 47

Sold Listings: 17

We are proud to announce that this Sunday, February 15, 2009, 2:00 PM to 4:00 PM we will be hosting an Open House at 13325 70B Avenue in West Newton, Surrey. This is an opportunity to visit this excellent Townhouse for sale in beautiful West Newton.

Please come with any questions you may have. In the meantime you can take a virtual tour of this West Newton Townhouse for sale.

As always please do not hesitate to give me a call at 604.595.2896 if I can answer any questions before the open house, or if you would like to book a private showing.

Scott & Marcella Williams
Money Saver Realty

I just sold this House at 14890 88A Ave, Surrey, British Columbia .

View this recently sold House or see all my home sales