Local housing starts down slightly

By Alejandra Pulido-Guzman - Lethbridge Herald on September 8, 2022.

Herald photo by Alejandra Pulido-Guzman Houses continue to be built in the westside Country Meadows subdivision, adding to the Housing Starts stats of the BILD Lethbridge Housing report.

LETHBRIDGE HERALDapulido@lethbridgeherald.com

Building Industry and Land Development Association (BILD) Lethbridge region recently released their annual Lethbridge Housing Report for July 2022 and it shows a steady market.

The report shows Housing Starts, Housing Inventory, Home Sales and Home Sale Prices categories.

Executive officer of BILD Lethbridge, Bridget Mearns, explained the different categories and graphs on the report during an interview with The Herald.

“A housing start is when a house is starting to be built, and it is considered completed when it is ready for someone to move in, so housing start is a good indication on the health of the industry as well as absorption,” said Mearns.

Mearns said that every time a house is started, there can be up to 60 people who work on a house, whether that be a designer, a finisher, a roofer or someone supplying the faucets, the painting or the drywall.

“There are all sorts of businesses and employment that goes around building a house and that’s why it’s an economic driver for community,” said Mearns.

She said that if housing starts are healthy, there is a healthy employment around that industry.

Mearns explained that the house starts are down by two single-family detached homes over the previous month. She said that compared to where they were in July 2021, they are down by 23 and comparing the stats to what the single-family detached house starts were in July 2021 from January 2021, this year they are down by 77 between January and July 2022.

“We can see all those single-family houses are down, semi-detached is up, and apartments is up and year to date overall there’s 47 more permits than last year,” said Mearns.

She said there was quite a bit of building a number of years ago, which meant there was more inventory, and this is telling us that there is not as many single-family houses being built.

“That can be a reflection of the cost of them, because insurance rates have gone up, purchasing power has decreased. It could be that there’s enough single-family houses on the market, so it’s meeting demand and they’re shifting to semi-detached or row housing because that’s what people can afford,” said Mearns.

In the Housing Inventory category of the report single-family houses are shown as up from the previous month.

“There’s more single-family, that explains why the starts might be down,” said Mearns.

She explained that in general there has been an inventory change and that is why the inventory is dropping.

“We should start to see some house starts happening, and part of that could be just a correction, maybe there was too much of something in inventory and it’s just correcting but usually when you see the inventory dropping and there is still a demand, you’ll have to start building,” said Mearns.

She said that Lethbridge is pretty steady.

When it comes to cost, the report shows that single/semi-detached homes have gone up by 12.3 per cent year to date.

“This is not surprising. Cost of labour has gone up, materials has gone up, and the time it takes to get a house on the market because of supply, labour and all these other concerns, affects the cost of a house. So it’s not surprising to see that that’s up,” said Mearns.

She said single-family detached homes are by far the most popular among buyers, but not everyone can afford them.

“There’s these other products that help them, so this is where you see supply and demand, but that supply and demand is dictated byâ€¦purchasing power,” said Mearns.

She said it depends on what people can afford, the interest rate, which is one that might be keeping first-time home buyers out of the market.

“Now they’re faced with the stress test, and increased insurance so they might say we can’t get into the market, or if we do, we can’t get into the market at a single-family house,” said Mearns.

She said those people might be able to get in the market through a row house or duplex, which might explain the increased demand for that product.

“I would say that compared to last year, we’re on par with last year, but we’re seeing product types change,” said Mearns.