New rental apartments are dominating Greater Victoria home building as overall housing starts so far this year are beating expectations by already surpassing the total built in all of 2015.
The swift pace of construction is surprising even to those in the construction sector as the economy stays strong amid the region’s extremely tight rental vacancy rate.
“It was only a couple of years ago that we were struggling in this industry,” said Casey Edge, executive director of the Victoria Residential Builders Association.
Desperate renters are a huge part of the construction boom. Rental construction is reaching a pitch not seen since the early 1990s.
A fall 2015 report said the average apartment vacancy rate was 0.6 per cent, tightening up from 1.5 per cent in 2014.
Renters are posting ads on line, promoting themselves as quiet and responsible. Some give out personal details, such as the length of time they’ve been married, in the hopes of winning favour with a landlord.
Between January and the end of July, 2,028 new housing units were started in Greater Victoria, Canada Mortgage and Housing Corp. said in its monthly report released Tuesday.
That tops the 2,008 units that got underway in 2015.
Since 2000, the highest number of starts was 2,739 in in 2006, said Taylor Pardy, senior market analyst with the federal agency.
Of the 1,488 multi-family units started in the first seven months of this year, 1,056 are rental — more than double the number in the same time period last year, Pardy said.
Industry watchers said demand is being driven by newcomers to the region, downsizing babyboomers, millennials looking for a place to rent, rising employment, strong resale housing market, tight inventory and low interest rates. “Everybody’s first step in life is probably rental,” Edge said.
Developers are building new rental projects and crafting plans for more. Some of the most recent projects include an 11-storey rental tower with 134 units, which received approval from Saanich in June, at Uptown shopping centre. In Colwood, Capital City Centre is expected to have 284 rental units for students and families.
Prospective tenants lined up around the block in April for a chance to move into the 16-storey Hudson Walk One in Victoria, with its 178 rental units. Hudson Walk Two, another rental building, is also rising nearby. And 36 rental suites are planned to be part of 250 housing units proposed for the former Marigold Lands on Lochside Drive.
New homes, whether single-family or multi-family rental or condominium, are concentrated in certain areas. In the first seven months of this year, Langford led the way with 711 housing-unit starts, followed by Victoria at 661, and Saanich with 307, said Canada Mortgage and Housing Corp.
“It is interesting how Langford is really propping up the rest of the community in terms of housing starts and population growth,” Edge said.
“We really need to see some of these municipalities come to terms with rezoning applications and higher density. Because clearly Langford is carrying the ball in terms of construction, creating jobs, supporting the trades, and population growth in our community.”
Housing construction not only creates construction jobs but supports downstream retail, Edge said.
At the 500-acre Westhills development in Langford, a 46-unit condominium development in the Lakepoint district is under construction. “We can’t build fast enough,” said Dale Sproule, Westhills sales director. “We have virtually no standing inventory at the moment.”
So far, more than 450 homes, mainly single-family, have been built at Westhills. The six-storey Lakepoint condo features two floors of offices, topped by housing. More than 700 people registered their interest in the Lakepoint condo building. Prices run from $200,000 to $489,900 and the size of units is larger than typical, Sproule said. The average price of a condo was $359,936 in July, the Victoria Real Estate Board said.
