Calgary's home-building industry rebounded strongly in December, starting construction on nearly twice as many single-family dwellings as in the same month of 2008.

Canada Mortgage and Housing Corp. reported Monday that total housing starts in the Calgary area reached 657 units last month, up from 403 units in December 2008.

In December, 559 singledetached homes broke ground, representing an increase of 98 per cent from the 283 units started in December 2008. There were 98 multifamily units commenced in December, down 18 per cent from the 120 units started one year earlier, the federal agency reported.

Richard Cho, CMHC's senior market analyst for Calgary, said new single-detached construction activity has been improving since the summer, reflecting increased confidence as reduced inventory in the resale market persuades consumers to look at buying new.

"The strength in the single-family is a combination of several things. One is the low mortgage rates," he said.

"Another big factor is that the inventory levels in the resale single side have also come down. . . . Some of the individuals who have been looking at the resale market have looked to the new home market to find what they really wanted."

Things are looking up for the sector after a very diffi-cult 2008, said Don Dessario, president for the Calgary region of the Canadian Home Builders Association.

"The numbers are still showing positive signs," he said. "Obviously we're moving in the right direction."

Both Cho and Dessario agreed there are more entry-level buyers in the market than move-up buyers.

Overall, starts for last year fell to 6,318 units from 11,438 in 2008, almost entirely due to a slowdown in multi-family starts, which include semidetached, row units and apartments.

CMHC said single-detached starts were up nine per cent, increasing from 4,387 units in 2008 to 4,775 in 2009.

But multi-family production declined 78 per cent from 7,051 units in 2008 to 1,543 last year.

Fewer apartment projects breaking ground contributed to the decline in multi-family production in December as semi-detached and row units were both up on a year-over-year basis, CMHC said.

The inventory of unsold new single-family homes has fallen by 44 per in Calgary in December to 398 compared with a year ago, while the multi-family inventory has grown by 62 per cent to 500.

"When inventory levels are up, builders are a bit more hesitant to start new homes because . . . they are competing with their own products," Cho said.

He said more spec homes -- built without a specific buyer in mind -- are being constructed. CMHC figures the spec proportion of overall building has climbed from five per cent in January 2009 to about 13 per cent in November.

Dessario said incentives to buy spec homes are disappearing as the inventory of unsold properties diminishes, adding there is some movement toward higher new home prices.

He said the number of construction jobs is on the rise, too.

The record year for single-family home construction in the Calgary area was 2006, when 10,482 homes were started. It was one of the biggest years since the 1970s for multifamily construction, with 6,564 units started.

Meanwhile, Statistics Canada reported Monday that the dollar value of building permits obtained in November in Calgary fell by 47.4 per cent from October and by 31.8 per cent compared with the year-earlier period to $498 million.

Provincewide, November permits jumped by 6.5 per cent to $1.1 billion from a year earlier, with a 42 per cent rise in residential construction more than making up for a non-residential fall of 19 per cent.

dhealing@theherald.canwest.com