Greater Victoria led all of British Columbia when it came to issuing new building permits in August 2018.
Issued building permits in the region rose almost 91 per cent from August 2018 to September 2018. Only Quebec’s Trois-Rivières with an increase of 147.4 per cent and Newfoundland’ and Labrador’s St. John’s with an increase of 133.5 per cent outpaced the Greater Victoria region.
Year-to-year Greater Victoria issued 24.1 per cent more permits in August 2018 when compared to August 2017.
Nationally, Trois-Rivières led the way again with a year-to-year increase of 144.7 per cent.
But if these numbers suggest that the local building market remain robust, a closer look reveals that the non-residential sector drove most of the growth, according to Statistics Canada.
According to Statistics Canada, residential developers are shying away from building single-family dwellings. These global findings line up with more regional findings that appear in the most fall Housing Market Outlook produced by Canada Mortgage and Housing Corporation (CHMC).
“Housing starts [in Victoria CMA] are forecast to decline from a peak reached in 2017,” it reads. “Fundamental demand-side factors such as population growth, employment growth, and affordability indicate more modest levels of construction moving forward.”
In short, developers are not going to invest in new housing, because the fundamentals suggest that demand for them will be lower than it has been in past.
Declining housing starts also confirm softening demand for homes generally, as new mortgage rules, regulatory changes and larger fundamental have eased demand, thereby softening prices. They in turn signal the market to build fewer new buildings, except that local builders might end up sitting on an excessive supply of units.
“The number of housing units under construction in Victoria’s housing market this year is the highest seen in a generation, and is a risk to rapidly rising inventory levels if the large number of units under construction are not absorbed in a timely manner,” CHMC warns.