CPABC:  BC Check-Up

February 22, 2021

Greater Victoria Housing Starts And Major Project Inventory Slowdown In 2020

VICTORIA – 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 across Greater Victoria declined by 12.4 per cent in 2020 compared to the number started in 2019.

“Development of Greater Victoria’s residential real estate has flourished in recent years, but with the pandemic it was not a big surprise to see it take a step back,” said Lindalee Brougham, FCPA, FCA, principal at Grant Thornton LLP. “However, the decline remains well below the provincial average of 18.3 per cent and indicates that Greater Victoria has been relatively resilient.”

In total, 3,209 housing units began construction in Greater Victoria throughout 2020, down from the 3,662 units started in 2019. The decline was concentrated in attached starts, which include units such as condos, apartments, and townhomes. In 2020, 2,405 attached units began construction, down 17.8 per cent compared to in 2019. Conversely, the number of detached units started actually increased by 9.1 per cent over the same periods.

“Prior to the pandemic, the number of attached units such as condos ramped up production in Greater Victoria while detached lagged behind. The pandemic reversed this trend,” noted Brougham. “This coincides with surging homebuyer demand and prices for detached units witnessed in recent months. How these trends adapt in 2021 will be an important investment trend to follow.”

Meanwhile, the estimated capital cost of all major projects in Greater Victoria – defined as projects with a cost of over $15,000,000 – stood at $14.5 billion in Q3 2020, down 3.1 per cent compared to Q3 2019. Three-quarters ($11.1 billion) of that capital is invested in projects under construction, with a total of 39 projects underway.

“While Greater Victoria experienced a small dip in the overall level of major projects, it also benefited from the majority of the projects being actively under construction. This economic activity has helped the region navigate the pandemic, as seen in robust construction employment numbers across the region,” continued Brougham. “And promisingly, the region has projects expected to come online soon.”

As of Q3 2020, there were 27 new projects estimated at $710 million expected to begin construction in late 2020 or into 2021.

“Going forward, major capital investment will help repair the economic damage resulting from the 2020 recession,” concluded Brougham. “Greater Victoria should actively encourage and invest into developments that enhance our recovery, build important infrastructure, and improve housing affordability.”

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