Builders are scaling back their activities in the residential market of Greater Victoria, new figures show.
Figures from the Vancouver Island Construction Association (VICA) show the total value of building permits issued between January and June 2019 dropped by 39 per cent compared to the same period in 2018, with much of the decline falling on the shoulders of the residential market, where values dropped 45 per cent.
To appreciate the importance of the residential market, consider that residential building permits (as measured by value) accounted for 85 per cent of permits issued in 2018 and 75 per cent in 2019.
The value of non-residential permits also dropped across all categories, but less dramatically, with the value of total non-residential building permits down four per cent between January and June 2019 compared to the same period in 2018.
The larger picture for Vancouver Island appears mixed, tipping towards the negative on the residential side.
The value of building permits across Vancouver Island dropped 11 per cent between January and June 2019 compared to the same period in 2018, with residential permits down 21 per cent in terms of value.
VICA’s analysis notes that residential builders are responding to fewer housing sales by taking out fewer building permits. Non-residential construction has also generally slowed down, with the proviso that it has been strong in some regions.
As for the remainder of 2019, VICA describes the outlook as “mixed though emerging and underlying domestic economic trends and policy developments,” suggesting some gains ahead.
“The main economic risk lies externally from the escalating trade disputes between major global economies,” it reads. “Domestically, lower interest rates and the federal government’s First Time Home Buyer incentive program will provide a lift to the residential market and construction activity.”
The region also remains attractive for those currently living elsewhere in British Columbia and Canada, it reads.
Overall, VICA predicts the value of total building permits to “ease” in around $2.25 billion by the end of 2019, mainly on weaker residential activity, compared to $2.47 billion in 2018.
“Prospects for 2020 are quite dependent on external economic risks,” it reads.