City of Vancouver Building Permit Values Top $1 billion for First Time in Five Years
The City of Vancouver issued $1.1 billion in building permits during the first six months of 2012, a 40-per-cent increase over 2011 and the first time in five years that construction has topped the billion-dollar figure for the first half of the year.
“This adds to overall economic growth; it means more construction jobs and related spinoff jobs,” said Helmut Pastrick, chief economist at Central 1 Credit Union.
Pastrick said the B.C. economy as a whole has not been performing as well in 2012 as it did in 2011 and the spike in construction activity the Vancouver building permit values represents, will provide a welcome boost to the economy.
“It’s certainly a positive boost, Construction is one of the few sectors that is contributing to the economy in a positive way,” he said.
The city said in a news release Thursday that residential, commercial, and industrial construction has gone through a “major rebound,” marking the first time since the 2008 recession that values have surpassed the billion-dollar mark.
According to the city, construction activity added 6,000 new direct and spinoff jobs in Vancouver during the six-month period.
Mayor Gregor Robertson said it is the first time construction values have exceeded pre-recession levels.
The last time more than a billion dollars in permits was issued was the first half of 2007, when the figure hit $1.58 billion.
Adrien Byrne, communications manager for the Urban Development Institute said the spike in permits show that the construction sector in Vancouver is healthy. It should translate into better prices for condominium units.
“Basically, there is a lot of supply coming on in the market. It shows a healthy market,” he said.
Byrne said the UDI is working closely with the city to reduce red-tape and planning hurdles.
“But that’s not the only thing. The market is getting progressively more affordable, which is making some projects a lot more viable than they might have been in the past. And that is supporting growth and development.”
“Developers are sharpening their pencils to be more competitive than the developer across the street. And the winner out of this is the consumer and the homebuyer.”
Key developments that contributed to the 2012 increase include a 22-storey residential building at 999 Seymour valued at $24.2 million and the 36-storey MNP Tower at 1021 West Hastings valued at $75 million.
“These numbers reflect the importance to the economy and to job creation that the development industry has. What we need is for these kind of numbers to continue,” Byrne said.
Commercial and industrial construction have also rebounded. During the first six months of the year, permits were issued for more than one million square feet of non-residential space, up dramatically from the 160,000 square feet that was permitted during the first six months of 2011.