House construction remains sluggish, with August housing figures dragged down by a surplus in rental housing in Nanaimo.
A total of 242 new homes were started through August, compared to 493 a year ago, according to new data from Canada Mortgage and Housing Corp.
House construction is down nine per cent across B.C., where housing starts fell to 2,204, from 2,458 in August.
In Nanaimo, housing activity fell 51 per cent year over year. Multiple-unit housing makes up the biggest chunk of the decline. A large chunk of that is purposebuilt rental accommodation. Just 113 permit applications for multi-unit housing were submitted through August, versus 330 in the same period last year. Single-unit housing starts fell to 129, from 163 last year.
In CMHC's last quarterly housing market report, in June, Nanaimo's vacancy rate stood at 8.3 per cent compared to a provincial average of 3.5 per cent. Last year about 300 rental units were built in Nanaimo.
"It takes a while to absorb those into the market," said Carol Frketich, CMHC market analyst.
"That can have an impact.
People want to move into new rental (units), from old rental. It does have an impact on the market. Last year was a strong year," Frketich said.
CMHC has adjusted its 2013 housing forecast to account for the decline.
"The forecast now is 520 starts, which is a 21 per cent decline from last year and it is mainly down on the multi side," Frketich said.
Last month, the city of Nanaimo was on track to approve subdivision applications for 77 single-family lots, and was working through statutory requirements to allow 181 singlefamily lots and 23 multi-family lots, which will be comprised of about 362 strata units.
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