Eric Beauchesne
Sun
A new building boom, potentially even greater than during the late 1980s, may be in the offing.
It’s not a home-building boom, but rather a boom in non-residential construction.
“Businesses and governments planned to invest massively in the construction of buildings,” Statistics Canada said Thursday, reporting a “blistering” increase in non-residential building plans in March.
The value of residential and non-residential building permits rose five per cent from February to $5.27 billion, the second highest level on record.
But unlike most months in recent years, the surprising increase was driven by non-residential building intentions.
“The most important aspect of the March report is that total permits remained near record levels as a major shift toward non-residential construction more than offset a moderation in the residential sector,” observed J.P. Morgan economist Ted Carmichael.
Non-residential construction permits surged nearly 40 per cent to $2.3 billion.
“This level surpassed the previous record-high reached in August 1989, and was 50.1 per cent higher than the average monthly level in 2004,” Statistics Canada noted.
And all sectors contributed to the gain, suggesting widespread strength in non-residential construction in the months to come.
The surge in non-residential construction plans, which have been on an upward trend for years, couldn’t have come at a better time, as there was evidence of the long-awaited slowdown in the housing boom.
Regionally, Toronto has led the way with increases in both the non-residential and residential construction plans. There were also strong increases in all municipalities west of Winnipeg.
A dramatic increase in building permits in Abbotsford comes as no surprise to area realtor Jake Siemens, president of the Fraser Valley Real Estate Board. He says residential and non-residential development is booming in the town.
“We have had a lot of growth in big box stores along Sumas Way and the Mount Lehman corridor, with retail development growing by leaps and bounds on both sides of the Fraser Valley. There are also new residential subdivisions growing up to the west and south-east of town.”
Many projects have been in the works for years, said Siemens, who has been with Abbotsford’s Landmark Realty for 18 years.
“All of a sudden, a lot of the stuff is coming on stream at the same time. There is huge, huge demand, especially for residential.”
He said buyers typically come from Surrey and other areas south of the Port Mann Bridge, attracted not only by price but also because Abbotsford typically offers more privacy with larger lots and more rural settings.
Nationally, the demand for housing is cooling, Statistics Canada said, noting that the number of housing units authorized in March fell to a two-year low.
BUILDING INVESTMENTS:
The total value of building permits issued by Canadian municipalities in March reached $5.27 billion, the second highest level on record.
Growth in value of permits for the first quarter of 2005, compared to the same period a year ago: +10%
Vancouver +39%
Victoria +128%
© The Vancouver Sun 2005
