Housing Starts Decline While Major Project Activity Remains Steady
DUNCAN – According to BC Check-Up: Invest, an annual report by the Chartered Professional Accountants of British Columbia (CPABC) on investment trends across the province, the number of housing units that began construction in Vancouver Island outside of Greater Victoria declined by 9.0 per cent in 2020 compared to the number started in 2019.
“Given how the COVID-19 pandemic created uncertainty for investors, it is not surprising to see fewer housing units started in 2020,” said Woody Hayes, FCPA, FCA. “However, the decline is also relative to a very robust level of housing activity seen across Vancouver Island in 2019. When you compare to 2018 numbers, starts in 2020 were actually up.”
Through 2020, 2,805 housing units began construction in Vancouver Island & Coast (excluding Greater Victoria), a decline from the 3,084 started in 2019, but an increase from the 2,323 in 2018. The decrease was concentrated amongst attached units, which include units such as condos, apartments, and townhomes. In 2020, 1,745 attached units began construction, down 13.7 per cent compared to 2019. Meanwhile, detached units fared better and declined a modest 0.3 per cent in 2020.
“In recent years, there have been several major residential developments which saw an influx of attached units started,” continued Hayes. “While that took a step back in 2020, the region was more resilient than the province as a whole, and by Q4 2020 had made a strong recovery. In addition, investment into major projects in the region will help our economic recovery and attract more housing.”
The total value of major projects – defined as those with a cost of over $15,000,000 – across Vancouver Island (excl. Greater Victoria) stood at $16.4 billion in Q3 2020, up 0.1 per cent compared to Q3 2019. Of all major projects, just 13 are currently under construction with a total value of $534 million. The majority are currently in the proposal stage, with 34 projects forecast to have a capital cost of $11.3 billion. One major project, the Bute Inlet Hydroelectric Project ($3.3 billion), was recently put on-hold.
“While the region has a large number of proposed major projects, few are under active construction,” concluded Hayes. “Major projects are a key economic driver, bringing jobs and capital which help growth. However, several projects with a total capital cost of over $1.0 billion are expected to begin construction over the next year, including the Cowichan District Hospital Replacement. They will be critical to help spur the Island’s economic recovery from the deep 2020 recession. Where possible, we should expedite the approval and commencement of these proposed projects.”
To learn more, see www.bccheckup.com.