Island building permits total $648 million in second quarter

Concrete flows and nail guns continue to snap around the Island as the construction industry keeps a brisk pace over the summer, according to data released Friday by the Vancouver Island Construction Association.

The total value of construction permits issued in the second quarter rose six per cent to $648 million compared with the first quarter of this year. Residential permits jumped 19 per cent while non-residential permits fell 25 per cent.

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Residential-permit activity was higher in most regional districts over the first quarter, led by a 94 per cent increase in the Nanaimo Regional District, followed by a 62 per cent increase in the Cowichan Valley, said Rory Kulmala, VICA’s chief executive. “We also saw robust activity in Strathcona and Powell River with a 49 per cent and 31 per cent increase in residential permits, respectively.”

The story in Greater Victoria was not as healthy.

The value of building permits issued in Greater Victoria dropped 13 per cent in the second quarter, compared with the first quarter.

According to VICA, because of weaker residential starts, the region’s total building permits are expected to slow down in 2019 for a total of $2.25 billion, compared with $2.47 billion last year.

VICA points out residential builders in Greater Victoria are responding to a slowdown in home sales by taking their feet off the gas. Residential permit values were down 21 per cent in the first half of 2019 compared to last year.

In Nanaimo, major projects contributing to the increase in permits included a 110-unit condo building valued at $64 million in Old City, and a 159-unit affordable housing development for seniors, valued at $27.8 million.

The drop in non-residential permits on the Island was led by a 54 per cent drop in institutional building permits, a 32 per cent drop in industrial permits and flat growth in commercial permits.

Island-wide, a total of 36,100 people were employed in the construction industry in the second quarter, an increase of 3.1 per cent over the first quarter.

“Although we are starting to see some highs and lows in our data, the region's construction industry will remain strong throughout the rest of 2019,” said Kulmala. “Despite a 15 per cent slowdown in residential construction in the Capital Regional District, the residential sector should soon firm up Island-wide in response to lower interest rates and the upcoming federal housing incentive program.”

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