CLR Connector All Parts of Construction Supporting Growth
The report also suggests that the steep and rapid fall in interest rates at the outset of the pandemic improved housing affordability and in turn fueled demand – in B.C. and across Canada. Established home resales and prices surged to record highs in 2020. Over the first five months of 2021, the number of permits for new housing units was up 11% compared to the same period last year. An uptrend in permit activity points to more residential construction, especially outside of Metro Vancouver. In Kelowna, residential permits are three times higher than during the same 5-month period last year. Residential permits have also rebounded in Victoria. And in non-Metro B.C. (all areas excluding Metro Vancouver, Victoria, Kelowna and Abbotsford), residential permits are up 50% YTD and also at new highs.
The overall B.C. permit numbers are tempered by a softening in permits in Metro Vancouver where the number of residential permits issued so far this year remains well below last year’s pace and at their lowest level since 2013. Whether this is a temporary situation or, instead, reflects concerns over housing affordability among existing residents and potential in-migrants is unclear. Non-residential building permits have generally followed a similar pattern to residential permits. A 6.4% increase from last year suggests additional non-residential building activity in the coming months and into 2022, but the total value of non-residential permits is well below the level back in 2019.
Mirroring residential permits, non-residential permits are also soft in Metro Vancouver, with a stronger picture evident in most other regions of the province.
As noted earlier, the construction sector helped temper last year’s downturn. Within the broad construction sector, however, the real differentiator was the engineering construction segment (LNG, pipelines, and Site C) where GDP (after inflation) surged 18%. In the other large provinces, engineering construction GDP has posted double digit declines.
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