New home construction in the capital region has climbed nearly 70 per cent so far this year compared with 2015, playing a major role in Vancouver Island’s construction industry boom.
“Our members are going flat out,” Greg Baynton, president of the Vancouver Island Construction Association, said Monday.
He has never seen all sectors of the construction industry so busy in all areas — infrastructure, industrial, commercial and residential projects.
“It is all coming together in a beautiful storm.”
Even so, the non-residential sector remains highly competitive as construction picks up Island-wide, Baynton said.
Construction is predicted to intensify until peaking in 2018 and then level out for a few years, he said.
Greater Victoria’s hot housing market is spurring developers to put up all types of homes.
“Strong activity in the resale market, declining inventories of new and existing homes, and a low rental-market vacancy rate are supporting the increased pace of new home construction,” Taylor Pardy, a senior market analyst for Canada Mortgage and Housing Corp., said of the capital region.
Rental-unit development stands out, Pardy said.
Demand is strong for rental units in Greater Victoria, which had a vacancy rate of just 0.6 per cent as of October 2015.
The Greater Victoria Rental Development Society is trying to address that shortage.
A $10-million building permit has been issued by the Town of Sidney for the society’s latest project at Fourth and Fifth streets. The Aranza, a five-storey, 56-unit development, will include commercial space on the ground floor.
The society also has the five-storey Azzurro under construction. Expected to be complete in late 2017, it will feature one floor of commercial space and four floors with 54 rental units.
In the first six months of this year, 1,588 homes were started in the capital region, up 68 per cent from 984 in the first half of 2015, CMHC said.
In June, 479 homes got underway, compared with 139 in the same month last year.
As is usual in the capital region, much of the development is in Langford, Saanich and Victoria, where both single-family and multi-family homes are going up.
B.C. as a whole reported a 42 per cent increase in starts, at 20,326, for the first six months of this year, compared with 14,286 last year.
Examining the six-month moving average of seasonally adjusted rates, CMHC finds the trend of starts is at its highest level since 1990, said Carol Frketich, the federal Crown corporation’s regional economist for B.C.
“The inventory of new completed and unsold homes is extremely low,” she said. “As well, a lack of existing homes for sale, rising home prices and low rental vacancy rates have spurred new home construction, pushing British Columbia housing starts to historic highs,” she said.
Nationally, the rate of home construction increased in June, with the seasonally adjusted annual rate of housing starts at 218,333 units, up from 186,709 in May.