A new report on residential housing construction in Greater Victoria says that while 2022 was a strong year, “cracks” in invest are starting to show.
The report BC Check-Up: Invest by the Chartered Professional Accountants of British Columbia (CPABC) says there were 4,787 housing units that began construction across Greater Victoria in 2022.
The 4,787 units which began construction in 2022 was a decline of 0.5 per cent from the record 4,809 started in 2021, but above the average of 3,555 from 2016 to 2020, the report said.
“The significant number of housing units started in the area last year are needed to house our rapidly growing population,” said Lindalee Brougham, president of LL Brougham Inc., about the report. “While down slightly from the record set in 2021, the housing investment in 2022 remained well above historical norms.”
In total, 3,970 were attached units such as condos, townhomes and apartments, up by 4.1 per cent from 2021 and representing 82.9 per cent of all the units started in 2022. There were 817 detached units started, down by 17.8 per cent.
“Last year, housing activity was strongest in larger developments with many units. And with the high cost of land here, there is a need for density,” said Brougham. “Another positive investment trend was a strong level of major project construction.”
Despite the big numbers, there is trouble on the horizon due to rising interest rates, the report said as between March 2022 to January 2023, building permit value declined by 32.9 per cent. The scale of the decline was similar for non-residential permits (-35.8 per cent) and residential permits (-32.2 per cent).
“High interest rates are expected to stay and the significant decline in building permits issued across Greater Victoria indicates building investment may weaken significantly in 2023,” concluded Brougham. “Given how important these investments are in terms of providing additional housing and services, and spurring economic growth, it is more important than ever that we foster an environment that attracts more capital to our region.”
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