A B.C. economist is concerned about the downward direction of new housing figures.
Brendon Ogmundson, chief economist with the British Columbia Real Estate Association, says he hopes a "sharp decline" in the number of new multiple units, as well as a decline in the number of new single-family units, does not signal worse things to come.
"I'm not surprised at the steady fall in single (family) dwellings," he said. "But the last few months of multiple unit dwelling permits is perhaps the start of a concerning trend that will lead to fewer starts in the back half of this year and into 2025 if it continues."
Figures produced by BCREA show that about 1,500 new multiple dwellings units came online in June — a figure not only well below the recent peak of just under 7,000 in April, but also under the 12-month moving average of just above 3,000 in June.
Ogmundson pointed to these numbers while responding to new figures from Statistics Canada that show the value of new building permits issued in June 2024 dropped by 23 per cent, the third-worst decline among Canadian provinces, while the value of new residential permits dropped by 11.5 per cent. While the value of new single-residential permits rose by four per cent, the value of new multi-family permits dropped by almost 20 per cent.
These figures appear against the backdrop of ongoing housing affordability concerns and a slowing economy. Central banks around the world are trying to counter these trends by cutting interest rates after raising them to counter post-COVID-19 inflation, but economists have expressed worries about deeper issues.
"It isn't necessarily unexpected that housing construction would slow in this market and rate environment, though hopefully, it's a short-term trend and not something more extended considering how much new construction we need in coming years," Ogmundson said.
B.C.'s Ministry of Housing said in a statement that government is making up for years of needed homes not being built. The statement acknowledges declining housing starts — down eight per cent to just 22,300 compared to the same period last year, a record year for housing starts in B.C.
The ministry notes that housing starts in 2024 continue to be well above the historical average when looking at the January to June period over the past 10 years.
The ministry also pointed out that B.C. ranked second among major provinces in housing starts per capita in June 2024, at 59.2 housing starts per 100,000, compared to 78.2 housing starts per 100,000 persons in Alberta, 55.3 housing starts per 100,000 persons in Quebec and 35.5 housing starts per 100,000 persons in Ontario. Those figures reveal considerable regional differences. Nanaimo led year-to-date increases in housing starts with 144.3 per cent, followed by Kelowna, (53.8 per cent), Abbotsford-Mission (27.1 per cent) and Victoria (5.1 per cent) while Vancouver declined with 18.2 per cent.
The ministry said in its statement government knows more work is necessary, in pointing to a list of legislative steps designed to speed up the delivery of housing, including rental housing.
“Our plan unlocks more homes by reducing barriers to affordable housing and accelerating the construction of new homes by supporting a more effective and efficient approvals process and a focus on targeted types of housing," it reads. "We’re ready in British Columbia to work with all levels of government – federal and municipal - to ensure that we’re building the housing we need for people across the province.”
