Greater Victoria is on the cusp of an all-time record for the number of housing starts in a year, according to figures released Friday by Canada Mortgage and Housing Corporation.
The CMHC reports the region has seen 3,700 new homes started so far this year, up from the 2,787 started through to the end of November last year. It’s just shy of all-time start numbers recorded in the 1970s.
“We are one thousand starts over last year, and we may even hit the 4,000-mark by the end of December,” said Casey Edge, executive director of the Victoria Residential Builders Association.
“It’s quite an anomaly, an astonishing number. We had no idea,” he said.
“I don’t think those kinds of numbers were foreseeable.”
The record for most new homes started in a year in the region was set in 1976, when builders started work on 4,439 new homes.
The 4,000-mark has been reached only two other times: 1972, when 4,192 new homes were started, and 1973, when there were 4,013.
This year’s boom is being driven by the multi-family market, CMHC said.
Of the 3,700 new starts, only 824 were single-family homes. That’s down from the 843 single-family homes started over the same period last year.
“The big jump this year has been in multi-family developments,” said Edge, noting that even Langford and Saanich, which traditionally build single-family homes, have jumped into that sector.
“That reflects the cost of land,” Edge said. “It’s really difficult to build single-family homes unless municipalities are willing to subdivide the lots. And there is still a lot of opposition to rezoning for smaller lots in a lot of neighbourhoods.”
Over the last two years, land costs in the region have increased significantly, as have the costs of building materials and skilled trades.
Developers have to look at multi-family projects to offer reasonably affordable homes.
Edge said unless municipalities change their tune on allowing subdividing and building of homes on smaller lots, the future of housing in the region will be condos and townhomes.
“If we are just going to reinforce what has always been done, the young single-family home buyer will be priced out of the market,” he said.
And things could get tougher for buyers in 2018.
Edge said the industry is paying close attention to what effect new mortgage rules, the likelihood of interest rate increases and changes to the building code will have on the cost of homebuilding.
Builders have been warning the provincial government that proposed Step Code requirements, an amendment to the B.C. Building Code to address energy efficiency, will amount to the biggest change to the building code in decades and could add as much as $80,000 to the price of a new home.
“All combined, those three factors will create significant challenges for the industry and the homeowner,” Edge said.