Downtown Sidney remains a hub of construction as work on a mixed commercial-residential project with 91 on the site of the former Sidney Fire Hall continues. Sidney was one of the few communities in the Greater Victoria area that have seen housing starts from January to November 2019 rise compared to the same period last year, albeit at a low level, rising to 88 from 74. (Wolf Depner/News Staff)

Housing starts, value of building permits down across Greater Victoria

Fundamental changes, municipal regulations blamed for the drop with some communities bucking trend

New figures show housing starts are slowing in Greater Victoria, but at a high level, with analysts citing a number of factors.

Preliminary housing data from Canada Mortgage and Housing Corporation (CHMC) shows new construction starts in Greater Victoria dropped seven per cent between January and November 2019 compared to the same period in 2018. The drop happened across all types of buildings with starts for single family homes dropping 23 per cent, and a combined three per cent for all other types.

Braden Batch, senior analyst, economics with CHMC, warns against reading too much into this drop, because it is happening against the backdrop of record setting years in 2017 and 2018 not seen since the mid-to-late 1970s.

“It [3,242 new housing starts] is actually quite a lot of housing starts for Victoria, especially if you look at a longer time scale,” he said, adding later that Victoria has been seeing historically unprecedented housing starts. “Basically, it is down by the amount of one or two major projects. We can easily see a major project come on line in December and that would equalize it.”

RELATED: New buildings approved for old Sidney fire hall site

But Batch is not sure so this will happen. A CHMC forecast released earlier this year predicts that the number of big projects will “taper off” in the coming years because of larger changes.

The release of the new CHMC data coincided with the release of new figures from Statistics Canada that show the value of building permits issued by municipalities in the Victoria Census Metropolitan Area (CMA) dropped by almost 40 per cent in October 2019 to 68.7 million. Compared to the same period last year, the value of building permits dropped almost 29 per cent from 96.4 million.

This regional drop appears consistent with the provincial picture with the value of building permits dropping 21.2 across British Columbia, the largest anywhere in the country. By comparison, the national value of building permits dropped 1.5 per cent.

RELATED: Greater Victoria records drop in building permit values

But Batch warns against reading too much into those figures.

“We know that construction has to slow down a little bit,” he said.

For construction to grow on top of record setting rates, the region would need much stronger population growth, much stronger employment growth, said Batch.

“The fundamental factors are starting to pull back,” he said. “So we will expect construction to pull back as well.”

Looking around Greater Victoria and the rest of Vancouver Island, new housing starts were up 91 per cent in Victoria, down 57 per cent in Saanich, 75 per cent in Central Saanich, and down 23 per cent in Langford. That said, Langford still created 39 per cent of all new housing in the region with 1,254 units. Esquimalt, Colwood and Sidney have also recorded higher housing starts.

Casey Edge, executive director of the Victoria Residential Builders Association, said developers are becoming “more wary” in larger economic fundamentals, such as layoffs in the forestry industry. The provincial government has also driven up costs through various taxes including the speculation tax, he said.

“Municipal governments like Saanich and Central Saanich are increasing permit fees and building costs through Step Code, while obstructing market housing,” he said, adding that Saanich council voted to fast-track government funded projects, while pushing back market housing to the back of the line.

“Home building requires manageable risk,” he said. “Adding government costs and uncertainty increase risk and erode new housing. This concept seems to be lost on some municipal councils.”


Like us on Facebook and follow @wolfgang_depner

wolfgang.depner@peninsulanewsreview.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

PHOTOS: Tour de Rock riders zoom through Sooke, visit big donor

11-year-old Sooke girl raised over $10,000 for Tour de Rock with bottle drive

Sooke seeks feedback on new building regulation bylaw

In addition to the online survey, a virtual online meeting takes place Oct. 22

Worklink march in Langford supports Orange Shirt Day

Ahousaht Prayer Song sets the tone

No ‘harmonious solution’ dogs on beaches in Saanich, community-led study finds

Cadboro Bay Residents’ Association present findings to council Sept. 28

Langford launches new campaign to support local eateries

Participating eateries will introduce a new dish and a discount

B.C. counts 125 new COVID-19 cases, up to 1,284 active

No new deaths or health care facility outbreaks

Health Canada green-lights rapid COVID-19 test

Health Canada approved the BCube test from Hyris Ltd. in the United Kingdom Sept. 23

FINLAYSON: COVID-related job losses concentrated in urban areas… especially Metro Vancouver

The biggest job losses, in absolute terms, have been in Metro Vancouver

6 puppies rescued in mass seizure on Princeton farm die from illness: BC SPCA

Of the 97 distressed horses, cats and dogs seized, most of the puppies suffered from parvo

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Action demanded over death of First Nations youth in Abbotsford group home

Family and Indigenous organizations push for thorough investigation

U.S. boater fined $1,000 for violation of Quarantine Act

49-year-old man entered Canada to visit girlfriend in Surrey

More sex abuse charges laid against B.C. man who went by ‘Doctor Ray Gaglardi’

Investigators now focussing efforts on alleged victims within the Glad Tidings Church community

Reader’s Lens

Reader’s photo of the week

Most Read