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New home construction takes dip early in year

TRURO - New housing starts throughout Colchester County have taken a nosedive for the early part of this year, local contractors say.

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Rudi Loeffler, owner of Global Construction in Debert, has some new housing projects on the go, such as the one pictured here at the top of Upham Drive in Truro. But Loeffler anticipates it could be two to three years before construction activity returns to normal levels.

"Tough winter. Very tough," said Gerry Turner of Gerry Turner Contracting in Truro.

"We always run 10 or 12 men at least and we were down to three of us all winter. That's the first time I've been below 10 in four or five years, I guess."

He is not alone in making that assessment and while things seem to be picking up a bit of steam in the new housing market now, statistics from the County of Colchester show a definite decrease in new, single residential permits for the first few months of 2012.

"I don't think we've seen the worst of it yet to be honest with you. I think (this) year might be OK," Turner said. "But I think next year is going to be a lot harder. I truly believe that."

From Jan. 1 through to the end of March, the county issued a total of 12 new home permits, compared to 23 for the same period last year.

The dollar value for those permits was also down by about half for this year, from $3 million to $1.56 million.

April housing permits rebounded somewhat to 12 ($2.4 million value) from nine ($2.1 million) in 2012. But in May, the starts fell again to 11 ($2.2 million) from 15 permits ($3 million) for the same month last year.

That amounts to 35 new home permits so far this year, with a total value of $6.1 million, compared to 47 for the same period last year, with a total value of $8.2 million, a difference of about $2 million.

"You take 12 new homes, that creates quite a bit of revenue for contractors," said Manny Withrow, the municipality's manager of inspection services. "I think the overall trend is that people are a little bit more cautious with the economy. And we certainly see it here. It was a slow start but it's starting to pick up."

The Town of Truro also saw fewer new home starts this year with eight (valued at $5 million), compared to 11 ($5.75 million) for the first five months of 2012.

"It's just the economy," Turner said, of his take on the situation. "Believe it or not, I blame the media on most of it. They just got people so scared to death that they are just hanging on to all the money they can."

Rudi Loeffler, owner of Global Construction in Debert, said business for his company has been starting to pick up, but he agreed that many contractors are seeing a decrease in new home starts.

"I think just the economy in general. People are just hanging onto their money. They're not wanting to spend it right now," he said.

"The feeling is (among suppliers and contractors), it could be six months to a year before it really starts to change with two to three years before it gets back to where it should be."

Loeffler and Turner also agree that the downtuen in housing here is directly connected to an economic slowdown in the United States.

But Loeffler said he also believes lending restrictions have been tightened, which makes it harder for some people to qualify for a mortgage.

"Interest rates are low but it's tougher to get loans right now the way the government has things set up," he said. "I agree with it mostly, it just slows things right down."

Greg Johnson of Hub Well Drilling said the downturn in new housing starts has also affected his business.

"We're not busy at all compared to other years," he said. "This year, it's really surprising to me how many people have their hands in their pockets, they're just not spending," Johnson said.

"I bet you we're down 50 per cent compared to other years. Today our phone hardly rings."

 

 

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