New starts figures show things are starting to look up for Calgary and area new home builders.

The new home starts figures for July were released last week, showing builders poured foundations on 501 single-family homes last month, a 16% increase from the 431 homes started last July but reaching an even more important milestone, says Lindsay Kendall, market analyst for the Prairies and Territories for Canada Mortgage and Housing Corp.

“Single-detached starts increased year-over-year for the first time since November 2006,” says Kendall.

The resurgence can be attributed to four consecutive months (April through July) of increased sales activity and the likelihood builders have started to restock depleted inventories.

Builders spent the six-month period from October 2008 to March this year selling an excess inventory of spec homes, which are started before a buyer is in place, which have had an effect on monthly starts figures this year.

July’s single-family starts brings the year-to-date total to 2,050, 26% off last year’s pace of 2,759, but a much smaller gap than in March, when the year-over-year difference was 47%.

Despite bringing in the highest monthly starts since September last year, multi-family builders are still working through a massive amount of inventory.

July’s multi starts were 254, 43% off last July’s numbers and bringing the year-to-date total to 686, down 88% from this time last year.

“With inventories rising over the last 12 months and further increases expected, it is likely multi-family production will remain weak through the balance of the year,” says Kendall.

Across Alberta, housing starts in the seven largest centres were 1,454 last month, 19% below last July, although three cities showed year-over- year gains: Edmonton up 11%; Lethbridge 35%, andRed Deer 16%.

Nationally, the seasonally adjusted annual rate of urban starts declined 5.5% to 113,500 units, says Bob Dugan, chief economist at CMHC’s Market Analysis Centre.

“The slight decline in July’s housing starts is mostly attributable to the volatile multiple starts segment,” says Dugan.

“Although July registered a decline, housing starts are expected to improve throughout 2009.”

Over the next several years, CMHC expects housing starts will gradually become more closely aligned to demographic demand, which is estimated at about 175,000 units per year.