Lower Mainland commercial building permits outpaced the residential sector through the first half of this year and are expected to retain the lead as home building heads for a “soft landing.”
Total building permit values in the region were 3% lower at $3.39 billion in the first six months of 2014 compared to $3.49 billion in the first six months of 2013, according to Statistics Canada.
Non-residential permits were 21% higher at $1 billion from $874 million last year. Residential permit values fell 11% to $2.3 billion, down from $2.6 billion in the first half of last year.
Commercial permits, fuelled by retail and office construction, are leading the construction curve.
“We expect the outlook for commercial permits to continue to be positive with the major [retail] projects underway in Tsawwassen and at YVR [Vancouver International Airport], as well as a number of proposed office building projects that are expected to commence construction soon,” said Fiona Famulak, president of the Vancouver Regional Construction Association (VRCA).
The residential outlook is less bullish, with Canada Mortgage and Housing Corporation projecting a flatlining of home starts through next year across all of British Columbia. B.C. housing starts are forecast to total 27,500 homes in 2014 and increase by just 400 units next year, CMHC says. The Lower Mainland will account for 18,400 of the 27,900 B.C. housing starts in 2015, the agency said.
“Total housing starts will remain relatively stable due to a well-supplied resale market and inventory of newly completed and unabsorbed units,” noted Carol Frketich, CMHC’s BC Regional Economist.
About 18% of the 8,825 new condos under construction in the Lower Mainland remained unsold and there is at least a 10-month inventory of new and unsold condominiums on the local market, CMHC suggests.
B.C., as the rest of Canada, will experience a “soft landing” in the housing market over the next year, CMHC states in its recent Housing Market Outlook.
