British Columbia (BC) is experiencing a surge in home construction, significantly outperforming its larger counterpart, Ontario, on a per capita basis. This trend offers a glimmer of hope in a province notorious for its high housing costs. However, the road to affordability remains long, with challenges like a low single-family home construction rate and industry-wide pressures.
BC Builds Big, But Per Capita Makes the Difference
Data from the Canada Mortgage and Housing Corporation (CMHC) paints a clear picture. In March 2024, BC boasted 4,867 new home starts compared to Ontario's 5,522. While Ontario has a larger overall number, considering population size reveals a different story. BC is constructing new homes at a rate 2.5 times higher per capita than Ontario.
This trend holds true when comparing major cities. Vancouver's new home starts in March 2024 were nearly neck-and-neck with Toronto's, despite Vancouver having a significantly smaller population (Vancouver: 2.6 million vs. Toronto: 6.2 million).
BC Outpaces Other Provinces
Looking beyond a single month, BC's construction boom is evident. Compared to 2023, the province has seen a 27% increase in new apartments and detached homes. This momentum extends nationally, with BC already surpassing Quebec (population: 8.7 million) in total home starts for the first three months of 2024.
The Single-Family Home Conundrum
While overall construction is up, there's a crucial caveat: single-family homes, a highly sought-after category, are not keeping pace. Compared to pre-1990 levels, detached home starts remain significantly lower. In 2023, only 5,500 detached homes were built in BC, a stark contrast to the 14,132 constructed in 1990 (CMHC data). This imbalance contributes to the high demand and cost of single-family homes in the province.
Apartment Construction Leads the Way
The majority of new home starts in BC are apartments. In 2023 alone, 37,513 new apartment units were built. While this helps address overall housing needs, it doesn't necessarily alleviate the pressure on the single-family home market.
Challenges for Builders
Despite the positive trends, the construction industry in BC faces several challenges. Inflation continues to erode profits, making it difficult for builders to maintain affordability. Additionally, a skilled labor shortage remains a significant hurdle. Incentive programs haven't been enough to attract enough qualified workers, leading to higher wages and increased competition for builders.
Municipal approval processes also contribute to delays and added costs. Streamlining these processes could help expedite construction and potentially increase housing supply.
The BC Government Weighs In
The BC Ministry of Housing acknowledges the need for further action. They attribute the increase in construction to significant investments and efforts to address low housing supply. However, they recognize challenges like population growth, rising interest rates, and approval delays that can slow down construction.
The ministry highlights encouraging signs, with nearly 16,300 new homes registered in 2024, reflecting a 12.8% year-over-year increase. They point to the past six years (2017-2023) as evidence of progress, with an average of 44,235 homes registered annually, exceeding the pre-pandemic average (2002-2016: 31,887 homes/year).
Industry Calls for Action
The British Columbia Construction Association (BCCA) emphasizes the external pressures impacting the industry. Inflation continues to affect profits, and attracting skilled workers remains a challenge.
The BCCA urges the BC government to address prompt payment legislation and worker shortages. They argue that the lack of such legislation and a skilled workforce hinder efforts to combat affordability issues. Addressing these concerns could incentivize builders, streamline construction, and potentially increase housing supply.
Alberta's Construction Boom
While BC leads in per capita construction, it's worth noting the significant increase in new home starts in Alberta. The province reported a 57% increase in new home starts during the first few months of 2024 compared to the same period in 2023. This trend suggests a potential rise in housing supply in Alberta as well.
Looking Forward
The BC housing market presents a complex landscape. While a surge in construction, particularly apartments, offers a glimmer of hope, challenges remain. Addressing the single-family home gap, industry
