Building Permits Plunged in BC
Building permits plunged unexpectedly across Canada in November, with B.C.'s drop leading the way.
However, the head of a local builders' group believes the numbers reflect an unusual month because total starts in 2010 are expected to be nearly double that of 2009.
"This might be a one-month aberration," Greater Vancouver Home Builders' Association [GVHBA] president and chief executive officer Peter Simpson said in an interview after the Statistics Canada report was released Monday. "We're seeing housing starts increase and builders are planning multiple projects around the Lower Mainland.
"In 2009, there were 8,339 housing starts [in Metro Vancouver]. For 2010, we expect the numbers to be 14,500 to 15,000. That's nearly double the previous year, a very quick and healthy turnaround."
Simpson noted that B.C. will get a clearer sense of the year's housing starts today when the Canada Mortgage and Housing Corp. releases its year-end summary.
According to the StatsCan report, the lower value of construction permits, particularly for multi-family dwellings in B.C. and commercial buildings in Ontario, was behind the decline.
"The decrease occurred mainly in British Columbia, where there was a substantial decline in the value of multifamily permits from October, which was their highest level since May 2007," the survey noted.
B.C. also recorded the sharpest drop in single-family permits.
The value of permits across Canada hit $5.51 billion during the month, an 11.2 per cent drop from October and the second straight monthly decline.
Economists had expected permits to rise 1.5 per cent in November.
Statistics Canada said residential permits were down 7.2 per cent nationally to $3.18 billion, with multiple-unit intentions dropping 22.4 per cent . Single-family units, however, rose 3.4 per cent.
Non-residential permits fell 16.1 per cent to $2.31 billion in November. However, in B.C. the drop was sharper.
According to the report, the value of building permits issued in B.C. in November 2009 was $779 million compared to $658 million in November 2010, a 15.5 per cent drop. Of that, residential permits in November 2009 totalled $538 million, compared to $389 million in November 2010, a 28 per cent drop.
In Vancouver, building permits fell in both residential and non-residential sectors, with multi-family dwellings accounting for 70 per cent of the drop.
The Vancouver census area saw a 30 per cent drop in permits from $486 million in November 2009 to $338 million in November 2010 per cent drop from $853 million in October 2010.
However, Abbotsford-Mission saw a 51 per cent increase in overall permit value compared to November 2009, from $12.6 million to $19 million, while Victoria saw a 88 per cent increase from $69 million to $130 million.
Polygon Homes president Neil Chrystal said in an interview that he too believes November wasn't typical because 2010 was a steady year for starts and he's forecasting a 15 to 20 per cent increase this year over 2010 from 900 units to about 1,200 anticipated in 2011.
"It [November] was probably just timing," he said. "It could be a lag in getting permits, perhaps seasonality.
"It's looking steady for 2011. We won't break any records, but it should be a solid year. And this year, we think consumer confidence is back."
Tsur Somerville, director of the centre for urban economics and real estate at the University of B.C.'s Sauder School of Business, said in an interview that building permit numbers "are very, very volatile month to month, especially in places where you're looking at large multi-family strata buildings. Multi-family numbers are subject to much more swing than single-family numbers."
Somerville added: "You want to see a pattern for a couple of months, and not just for a month."
This entry was posted on January 11th, 2011 | Posted in General