House construction slowed drastically in July on Vancouver Island, a month when the sounds of hammers and power saws usually ring through new neighbourhoods.
Figures released in the July report from Canada Mortgage and Housing show a division between a bustling house construction industry in larger urban centres and smaller cities, including those on Vancouver Island.
Vancouver, Kelowna and Abbotsford-Mission all saw a bump in activity last month over July, 2012, while Nanaimo, Victoria and Courtenay all issued fewer permits for new construction.
In Nanaimo, single-detached house construction fell 17 per cent, to 117 units last month, from 142 units in July 2012. Multiple-unit construction dropped 65 per cent, to 100 units, from 282 a year ago.
"Really there's been an important decline compared to last year, that resulted from a lower level of rental apartment (construction)," said CMHC market analyst Etienne Pinel.
That is a reflection of a lower demand for rental accommodation, which creates a ripple that shows up in fewer homes roughly six months or so after demand falls off.
The news comes as experts debate the future direction of Canadian house prices.
It boils down to how to interpret recent Statistics Canada data.
Pinel takes a more optimistic view of what will happen in the next 12 months, based on models that predict a rise in economic fundamentals, such as employment and demand for goods and services.
"Based on our research we are expecting some of the fundamentals will increase, so (the economy) will improve over the latter part of this year and into 2014," Pinel said.
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