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Blog by Kevin Wong

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BC Building Permits Drop in Value for November, Starts Rise in December

According to BC Stats, the value of building permits issued by BC municipalities dropped sharply (-43.4%, seasonally adjusted) in November, following a 7.2% boost in October. Residential permits tumbled (-51.0%), eroding all of the previous month’s (+4.9%) gain. The value of non-residential permits also fell (-27.1%), halting two consecutive months of increases. Kelowna (-23.7%) and Vancouver (-60.4%) saw double-digit declines while, in contrast, hefty increases were seen in Victoria (+88.9%) and Abbotsford-Mission (+76.2%).

Nationally, permits slumped 11.2%, as seven provinces recorded declines. Non-residential permits were off 16.1% and the value of residential projects (-7.2%) was also down. Quebec (+20.5%), PEI (+18.1%) and New Brunswick (+1.0%) saw permits rise, while decreases in the rest of the country ranged from 5.8% in Alberta to 49.3% in Newfoundland & Labrador.

Compared to the same month last year, the year-to-date value of building permits issued by BC municipalities climbed 33.9% (unadjusted) in November, with activity escalating in all but one region. Nechako (+87.7%) posted the most substantial increase, but overall permits were mostly bolstered by intentions in Mainland/Southwest (+53.9%) and Vancouver Island/Coast (+13.5%). On the flip side, permits inched down in Thompson/Okanagan (-3.1%), due to a decrease in planned spending on institutional & government buildings.

The number of housing starts in the province ended the year with a surge (+43.2% seasonally adjusted) in December, bucking the national trend. Canadian starts were down 13.5%, as new building activity receded in five provinces. Along with BC, Quebec (+8.2%), Manitoba (+18.2%) and parts of Atlantic Canada escaped the general malaise. However, starts plummeted in Ontario (-44.8%) and were also off in Alberta (-4.5%) and Saskatchewan (-18.0%).

Nationally, the decline was attributed to winter weather conditions, together with volatility in markets for both single and multiple-family units. In BC, starts of single-detached housing in urban areas of the province were flat (+0.0%), but builders of multiple-family units ramped up construction (+75.4%).

Relative to the same month of 2009, the cost of new housing in BC’s largest city continued to climb in November. Home builders in Vancouver received 1.4% more for their projects, while Victoria’s housing price index decreased (-1.1%). Falling land value (-1.8%) in the capital city paired up with a moderate decline in housing prices (-0.7%) to pull overall value down. Conversely, a 3.4% increase in the cost of houses in Vancouver managed to offset a 1.2% decline in that of land. Nationally, the new housing price index rose 2.3% during the twelve-month period ending in December. (Data provided by Statistics Canada, CMHC and BC Stats).