Steep decline in residential sector follows a record-high June
Michael Kane
Sun
|
The value of residential building permits issued in Greater Vancouver dropped more than 50 per cent in July after soaring to unprecedented levels in June. Industry observers said the decline was largely the result of developers fast-tracking applications to beat a Vancouver-wide development cost levy that took effect July 1. Some developers also sought early approvals to take advantage of summer building conditions. “The housing market is still in good shape,” said Helmut Pastrick, chief economist for B.C. Credit Union Central. “A drop in building permits was expected in July, once we saw the sharp, sharp run-up in June. We expect multi-unit residential permits will also be on the weak side in August, but again that’s a reflection of a very strong June.” Across Canada, the value of both residential and non-residential building permits issued in July fell 11.4 per cent to $4.8 billion, from a record $5.4 billion set in June, Statistics Canada reported Tuesday. However, July was still the second-highest month on record. “The largest decline was in British Columbia, down 41.5 per cent to a still healthy $474 million,” StatsCan said in its monthly survey of building permits, released Tuesday. “This followed a record high in the residential sector in June, which was spurred by permits for multi-family dwellings.” StatsCan said the national housing market remained exceptionally strong, staying above the $3-billion mark in July — the third highest monthly total on record. “Very advantageous mortgage rates, the positive employment situation and an increase in disposable income helped fuel the feverish demand for new dwellings,” the agency said in a news release. In the non-residential sector, after two monthly gains, the industrial component fell 1.6 per cent to $301 million, but remained higher than the monthly average this year. StatsCan blamed the slide on lower demand in British Columbia‘s mining and agricultural building category, but, in a telephone interview from Ottawa, statistician Etienne Saint-Pierre cautioned: “The figures for mining and agriculture are very, very volatile, so it is not surprising to see big changes from month to month.” He noted that B.C. shows the country’s strongest gain in non-residential construction so far this year, up 10 per cent to $1.2 billion. In the Lower Mainland, total building permits were down 69.7 per cent in Abbotsford and down 50.6 per cent in Vancouver compared to June. Victoria was down 23.6 per cent. Peter Simpson, president of the Greater Vancouver Home Builders’ Association, said the July drop was expected because of the Vancouver development fee deadline and because many developers fast-track permits to take advantage of dry, warm weather for construction. Leading B.C. developers were also unperturbed by the numbers. “We are very active in the market right now and we have been very busy for the past two years,” said Neil Chrystal, president of Polygon Homes Ltd. “We think B.C. has so much going for it, with a sound economy, low interest rates and positive in-migration.” Dave Podmore, president of Concert Properties, said the market remains very strong and Concert has still to apply for permits for three projects in very advanced design stages. While sales traditionally slow during the summer vacation season, Tracie McTavish, director of sales with Concord Pacific, said construction continues “full steam ahead.” McTavish added: “If there is a strain in our little world it is probably the fact that we can’t get our buildings out fast enough to meet the demand, which is a good problem for us.” Permits plunge: The value of building permits in July fell 11.4 per cent nationally to $4.8 billion from the record $5.4 billion set in June. In B.C., building permits fell 40.3 per cent to $639.4 million. Abbotsford $9.4 million * -69.7% ** Vancouver $386.9 million -50.6% Victoria $41.1 million -23.6% B.C. $639.4 million -40.3% * Value of July building permits ** Percentage change, June to July © The Vancouver Sun 2004
|
