Construction activity around Greater Vancouver hit new highs in 2004, as evidenced by the value of building permits issued. As year-end numbers roll in, several municipalities have posted new high-water marks for permit value.

Most notably, the value of building permits issued in Surrey surpassed the $1-billion mark for the first time last year. To the end of December, the city had issued $1.026 billion in building permits, up from the previous record of $955 million set in 2003.

The total included $873 million worth of residential permits and $140 million in commercial and industrial construction, with the remainder in institutional projects.

“That translates into many thousands of jobs for our residents,” Surrey mayor Doug McCallum enthused, citing the impact on not only the construction sector but also retail and other service industries.

Among B.C. cities, only Vancouver has recorded more than $1 billion in permits before. Last year that city, too, set a new benchmark for permit value, at $1.73 billion.

“We are up markedly this year,” said the city’s director of development services, Rick Scobie. In June alone, Vancouver issued close to $500 million in permits as developers hustled to beat a development cost levy that came into effect July 1. By comparison, the city’s permit value barely topped the billion-dollar mark in 2003.

Burnaby also set a record, with builders committing to $514 million worth of construction in 2004, up from $331 million in 2003. The value of multi-family housing projects in Burnaby more than doubled year-over-year to $238 million.

But the action was not confined to the largest cities.

British Columbia, and metropolitan Vancouver in particular, led the country in construction activity for the 11 months leading up to Nov. 30, numbers released Monday by Statistics Canada show.

“Regionally, the metropolitan areas of Vancouver and Montreal recorded by far the largest dollar gains on a year-to-date basis. In both regions, the value of building permits was up by more than $1 billion compared with the first 11 months of 2003,” the federal agency said.

Statistics Canada identified “tight vacancy rates for apartments” in Vancouver and Montreal, along with low mortgage rates and healthy job creation, for the nationwide strength in home construction in November.

On a year-to-date basis, building activity in Greater Vancouver reached $4.474 billion, up 39 per cent from the same period in 2003.

Residential building in B.C. likewise was running 35.9 per cent ahead of 2003 as of Nov. 30, at $5.497 billion.

B.C. and Ontario led the country in other forms of construction in November, too. Non-residential construction exploded by 150.2 per cent in B.C. in November (from October), though the year-to-date rise in commercial projects was a more measured 7.3 per cent compared with 2003.

Permits for all types of construction in B.C. totalled $7.369 billion for the January-November period, up 27.2 per cent from a year earlier.

With December figures still incomplete in many places, Statistics Canada ventured to say that “the value of building permits will reach a new annual peak in 2004.”

With the exception of Vancouver‘s permit rush in June, construction activity was consistently strong throughout the year, said Peter Simpson, president of the Greater Vancouver Home Builders Association. Simpson attributes the current lull at many builders’ sales offices to a seasonal slowdown and expects things to pick up in the spring.

“We still feel there are a lot of first-time buyers out there,” he said, adding that migration to the province remains strong and a belief that interest rates will likely stay low.

The Canada Mortgage and Housing Corporation is predicting B.C. will be the only province to record an increase in housing starts in 2005, Simpson noted.

Scobie is not convinced the actual number and size of new developments increased as much as the statistics suggest, however. At least part of the higher permit values represent increases in the cost of concrete, steel and other building materials, not to mention labour. So people may just be paying more for the same number of new homes, offices and retail spaces.

But McCallum believes the numbers reflect real growth, noting how the number of dwelling units in Surrey rose to 4,134 last year from 3,828 in 2003. He also believes the economic impact of those building intentions in 2004 will stretch well into 2005 and expects another busy year for new construction, especially in commercial developments and business parks.

McCallum dismisses the notion that the pace of building is unsustainable, noting how two-thirds of Surrey‘s land base is taken up by parks and the Agricultural Land Reserve.

“We’re only developing a third of our land base for all that growth,” he said.

© The Vancouver Sun 2005