B.C. urban-area housing starts surged in March to drive a record first quarter of activity.
Starts rose 55% from 2020 as builders accelerated construction amid robust housing market demand and improving weather.
Annualized housing starts jumped 61% from February and more than doubled year-ago levels to a seasonally adjusted rate of 67,564 units. The main driver of March’s increase was for multi-family units, which jumped 77% from February to an annualized 57,850 units, while detached units rose 7.2% to 9,718. Metro Vancouver starts increased 62%; Victoria’s more than tripled from February.
Volatility in monthly housing starts is the norm given the influence of large-scale multi-family projects. That said, year-to-date gains have been observed across product segments. Detached starts rose 44%, driven by smaller markets, an increase consistent with the narrative of urban outflow as remote work options enable households to locate outside major metros. Multi-family starts rose 58% and represented about 83% of total housing starts. This gain was led by a 75% increase in Metro Vancouver multi-family starts as condo construction soared.
Increased starts reflect varying factors. Resale market demand has surged, and lack of inventory has driven demand for new building construction in smaller urban markets where prices are lower and land is available. Meanwhile, pre-sale activity rebounded after a weak early pandemic phase, allowing projects to reach required sales for construction financing. Condominium tenure starts rose 69%, freehold rose 43%, and rental starts increased 43%.
The recent upswing counters softer conditions in the construction sector in 2020. Total units under construction rose to 63,918 during the first quarter after easing the past year.
The first quarter’s stellar gains are expected to slow but annual housing starts are forecast to rise 10% to 41,000 units.
Consistent with the national picture, B.C. headline consumer price inflation rose sharply in March. Year-over-year consumer price index growth accelerated to 2%, up from 0.9% in February. Slower inflation at the front end of the pandemic and recent price gains contributed to the rise. •
Bryan Yu is chief economist at Central 1 Credit Union.
