New figures show B.C. leading Canada with new building permits are drawing cautious praise from an analyst.
But the figures are overshadowed by appearing on the eve of a potential trade war with the United States.
"As always, permit numbers are quite volatile month-to-month, but it鈥檚 certainly encouraging to see a big jump in B.C.鈥檚 permits, especially for multi-unit housing," Brendon Ogmundson, chief economist, with the British Columbia Real Estate Association, said.
New building permits in B.C. rose by 29.5 per cent in December 2024 鈥� six per cent more than in Ontario and nearly three times as much as the Canadian rate overall (11 per cent).
Residential permits drove the increase with permits for multi-unit housing driving residential permits. Compared to December 2023, the value of all B.C. permits rose by almost 40 per cent. Permits for multi-unit housing rose even faster at 56.5 per cent, ahead of permits for single-detached housing. That category is also growing, but at a much slower pace.
These figures broadly match figures released last month concerning actual new housing starts. While the overall number of new starts dropped by nine per cent, much of that drop reflected fewer single-detached units. Government has geared recent housing legislation toward encouraging multi-unit housing, especially in the rental field.
The new figures appear against the backdrop of trade tension. Ogmundson recently published a paper titled Choose Your Own (Mis)Adventure: How US Tariffs Could Impact BC Housing. It spelt out various scenarios and warned of serious economic consequences, with B.C. set to experience a recession inf the U.S. imposes tariffs of 25 per cent on all Canadian goods.
The report indicates the situation gets worse in case of a broader trade war and retaliatory tariffs by Canada. Under the most likely scenario, the provincial housing market would see a temporary decline before posting a robust recovery as mortgage rates decline substantially, unleashing pent-up demand.
"More difficult market conditions would delay some new construction projects as well, making long-term supply targets even harder to hit," Ogmundson said. "Even the uncertainty around tariffs is likely prompting some developers to hold off on new investment until the outlook becomes more clear."
"I think the best thing the provincial government can do is to set the policy environment needed to hit targets, and those targets should be aggressive even if they are ultimately unlikely to be reached," Ogmundson said. "That means zoning, fast tracking permitting and encouraging new ways of building through regulatory standards. Ultimately it鈥檚 up to the private sector whether it makes economic sense to build."
B.C.'s Ministry of Housing and Municipal Affairs welcomed the latest figures.
"The latest report from Stats Canada shows that our actions are making a difference for people and that construction is going strong," it said in a statement.
It specifically pointed to a new digital building permit hub designed to local governments issuing permits to streamline and standardize their local permitting processes.
"This Stats Canada report follows other recent indicators that our actions are working," it reads. "Housing starts in 2024 were well above the 10-year historical average, with the past four years (2021-2024) being the highest for total housing starts since tracking started in 1955. Reports from Rentals.ca show that rents are down year-over-year in major cities like Vancouver, Burnaby and 麻豆精选, while Canada Mortgage and Housing Corporation reports show that rental vacancy rates are increasing."
This said, rents remain near historical highs while vacancy rates remain historical lows. The February report from Rentals.ca still ranks Vancouver as the most expensive city to rent in Canada, pegging the monthly rent for a one-bedroom at $2,522 (down six per cent year-to-year), and a two-bedroom at $3,433.
Burnaby (3rd place) and Victoria (10th place) are other B.C. communities in the Top 10 most expensive rental markets in Canada, with Surrey (16th), 麻豆精选 (17th) and Nanaimo (22nd) making the Top 25.
The ministry acknowledged in its statement that more needs to be done, adding that B.C. is facing uncertain times.
