Photo: James Bombales
A months-long increase in the value of building permits issued by Canadian municipalities last year was capped off by a record-breaking December, suggesting a sustained homebuilding boom driven in no small part by insatiable condo demand.
The total value of building permits issued in December 2018 was a whopping $8.8 billion, up 6 percent from the previous month and the fourth-consecutive month of gains, according to Statistics Canada, which released the numbers this week.
To move forward with construction landowners must apply for building permits, which municipalities charge fees for, so Statistics Canada uses a survey of this paperwork to estimate construction levels across the country.
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The latest month-over-month increase came largely on the shoulders of development plans for multi-family housing, including condos and rental apartments, as well as a strong commercial segment, Statistics Canada says.
In a response to the data, BMO economic analyst Priscilla Thiagamoorthy notes that specifically demand for condos in Toronto and Vancouver helped push the value of permits for multi-family dwellings to $3.3 billion in December, a scorching monthly increase of 11.1 percent and an all-time high.
“And it’s no wonder no wonder, with millennials, international migrants, and downsizing baby boomers all vying for the seemingly last affordable option,” she explains.
“The unexpected pick-up at the end of last year would suggest a solid handoff for construction activity in 2019,” she writes in a note. “Despite some headwinds, overall construction activity should hold firm, supported by demographic fundamentals and a healthy labour market,” she concludes.
While building permits signal future development, plenty is already underway. RLB, a firm that tracks construction in major North American markets, recently counted 104 cranes in Toronto, the most of any city surveyed. Nearly half of these cranes are on residential construction sites.
“Heading into 2019, increased infrastructure spending is anticipated to trigger additional activity, with more than 400 high-rise buildings on the docket for development,” reads an RLB report.