BC’s new-home construction market has curiously shown few signs of slowing, despite decade-low sales figures in the resale market.
According to residential permit data prepared by BC Stats, the number of housing units under development in the province has increased 10% so far this year, rising to 16,782 between January and July compared with 15,168 in the same period in 2011.
The total value of permits has also jumped. It increased 18% to $4.1 billion in the first seven months of the year from $3.5 billion in the same period last year.
The bulk of the increased activity is in the Lower Mainland, with the total number of units being approved rising 15% and the total value of permits up 28%. Vancouver, Richmond, New Westminster and Surrey have recorded the largest increases in the number of units receiving approval so far this year.
Those intentions to build appear to be taking shape.
According to Canada Mortgage and Housing Corp. (CMHC) data, the number of housing starts in B.C. was up 12.6% in 2012’s first six months.
Larger condominium developments spurred on by municipal governments pushing to increase density in the region contributed the most to rising housing activity.
The CMHC noted that the number of condo projects with more than 200 units has risen 35% so far this year; the number of projects with between 100 and 199 units has more than doubled compared with a year ago.
However, there appears to be signs the slowing housing market might affect future new developments. The report noted the inventory of completed, unoccupied single-family homes is up 8.6%, and the inventory of unoccupied new condos has edged up 0.6% in 2012’s second quarter.
CMHC, however, isn’t drinking the Kool-Aid of market-crashing doomsayers. It noted that despite a slowing resale market, housing demand is still in line with market fundamentals as population growth and low interest rates continue to stimulate demand, and the local job market continues to improve, albeit slowly. •
