The total value of building permits issued in B.C. saw a double-digit drop in November 2024, consistent with industry reports that construction has been slowing in the province due to higher input costs and reduced buyer demand.
Statistics Canada (StatCan) reported Jan. 10 that monthly, seasonally-adjusted building permit values fell 13.4 per cent in B.C. in November.
This compares to a 3.6-per-cent decline in Alberta, a nine-per-cent decline in Ontario and a 5.9-per-cent decline countrywide.
Residential and non-residential building permit values in B.C. totalled $1.55 billion in November compared with $1.79 billion the previous month.
This 13.4-per-cent decrease was led by B.C.’s residential sector, which saw building permit values fall 30 per cent from $1.25 billion in October to $868 million in November.
Meanwhile, non-residential values saw an increase from $547 million in October to $686 million in November. The non-residential category includes industrial, commercial, institutional and governmental building projects.
The residential sector in B.C. faces significant headwinds, particularly when it comes to multi-unit and condo projects, which have decelerated in some regions.
The new condo market in Vancouver, and Canada more broadly, is struggling as developers encounter challenging conditions in the form of higher costs and reduced demand, said a recent report from PricewaterhouseCoopers LLP (PwC) and Urban Land Institute (ULI).
“In markets like Toronto and Vancouver, a significant market slowdown is underway as it becomes too costly for many developers to proceed with condo developments,” said the report published in November.
“Developers are also facing challenges on the revenue side as investors, who make up a large portion of new condo buyers in many markets, pull back.”
The PwC/ULI report said pre-sale activity in Vancouver is particularly depressed, as investors may lose money on renting out units and unsold inventory accumulates. Some buyers may also have trouble closing on purchases of new condos, the organizations said.
The newly released StatCan data appears to corroborate this grim assessment.
While single-dwelling building permit values saw only a minimal decline in November, the real kicker was a plunge in multiple-dwelling building permits, which went from $1 billion in October to $634 million in November, a 37-per-cent reduction.
“The decrease in the multi-unit component in November was driven by British Columbia (-$375.4 million), largely due to lower construction intentions in the Vancouver census metropolitan area (-$346.7 million),” said StatCan’s Friday release.
Although building permit values fluctuate and one month’s change can be anomalous, November’s residential and multi-unit figures for B.C. were lower than any month in the preceding year, apart from June 2024, when the Bank of Canada began cutting its policy rate after a post-pandemic spike.
