As British Columbians face the likelihood of average home prices in excess of $1 million in 2025, new figures raise questions about future available supply.
Figures released by the Canadian Mortgage and Housing Corporation Thursday (Jan. 16) show that new housing starts in B.C. dropped by 9.2 per cent to 45,828 in 2024 from to 50,490 in 2023, a record year for housing starts in B.C.
The picture, however, was not even across B.C. Housing starts dropped by double-digit percentage figures in Vancouver Census Metropolitan (minus 15 per cent) and Victoria Census Metropolitan Area (minus 16 per cent). These drops occurred against the backdrop of record-high interest rates, impacting demand among potential buyers and various costs among builders. They also broadly reflect the place of Vancouver CMA and to a lesser degree Victoria CMA among the most expensive places in Canada to purchase land.
Governments have responded to this by allowing for more density, adding incentives to create more units and curbing speculation. But those measures likely require more time to fully work their way through the system.
But as housing starts declined in B.C.'s most populated regions, they picked up in larger cities outside the Metro Vancouver-Greater Victoria corridor.
Kelowna saw an increase of 28 per in new housing start, while Kamloops jumped 21 per cent. On Vancouver Island, Nanaimo rose by nearly 100 per cent, going to 1,029 new starts in 2024 from 546 in 2023. Prince George saw even more impressive numbers, going from 202 starts in 2023 to 559.
Smaller communities in the various regions also saw some boosts, but the picture appears to be more mixed. Communities altered between boom and bust cycles, with the proviso that each market has unique conditions based on perceived attractiveness, geography and other factors.
Consider Vernon. In 2019, the North Okanagan community nestled among three lakes and near the regional hub of Kelowna saw 507 new housing starts in 2019 before dropping in 2020 (335) and 2021 (291). Starts then rose again in 2022 to 444 before dropping again in 2023 (343) and 2024 (265).
Of note is the type of construction. Looking at communities over 10,000, 80 per cent of all new housing starts in 2024 were linked to apartment buildings (34,887), a drop of seven per cent compared to 2023 (37,513). But the number of new single-detached housing starts dropped by 20 per cent from 5,540 in 2023 to 4,444 in 2024.
This development gives additional support to the theory that single-detached homes have become an "endangered species", as Shaun Cathcart, Canadian Real Estate Association director and senior economist for housing data and market analysis, described them during a recent presentation.
Also, nearly all B次元官网网址� 95 per cent B次元官网网址� of the 17,673 new housing starts classified as rentals in 2024 were connected to apartment buildings. The number of new rental housing starts themselves barely budged in 2024 (17,673) compared to 2023 (17,563).
That could be read as a positive insofar that high interest rates and other factors did not discourage rental construction or as a negative because the number of new rentals barely changed, even as demand has remained high.
B.C's Ministry of Housing and Municipal Affairs said in a statement to Black Press Media that the housing start figures for 2023 represented a record year for housing starts in noting "that B.C. is grappling with the same big challenges faced by other jurisdictions including global inflation and rising interest rates."
It said government is "determined to make sure everyone in B.C. has access to an affordable place to live" in noting that recent actions "are already making a difference.
"(Rents) are going down, rental vacancy rates are increasing and weB次元官网网址檙e delivering hundreds of thousands of homes in existing neighbourhoods by fixing outdated zoning rules that were blocking townhouses, row homes and duplexes from getting built and creating (transit oriented communities) near transit hubs," it reads.
The statement also points to a measure other than CHMC's housing starts to make the case that B.C. remains an attractive place.
Data tracked by the province shows the registration of 46,196 new homes in 2024. This data measures residential construction activity at the beginning of a project, before authorities issue building permits or before construction starts. With registration up 2.5 per cent compared to the previous year, this represents "good sign for future housing starts."
