For the second year in a row, construction on Vancouver Island set records with building permits increasing nine per cent to $2.45 billion in 2018 and construction employment increasing 3.8 per cent to 35,700 workers.
“Population and income growth, low interest rates and consumer confidence spurred demand for homes and buildings across Vancouver Island last year,” said Rory Kulmala, CEO of the Vancouver Island Construction Association (VICA). “In turn, construction continued to help drive regional economies.”
The fourth quarter of 2018, however, was a different story. Fewer building permits were issued in all regional districts, except in the Comox Valley, which saw no change from the prior quarter.
The total building permits issued on the island for the fourth quarter dropped 16 per cent from the third quarter of 2018 to $481.2 million. Permits declined across all categories — commercial, industrial, institutional-government and residential — led by a 38 per cent decline in non-residential permits and an eight per cent decline in residential permits.
Major projects in the Capital Regional District include renovations to the high-profile office building at 2975 Jutland Road at Selkirk Waterfront, valued at $5.8M, a 56-unit condo building at 1588 North Dairy, valued at $13.75 million, and construction of a three-story, 11-suite rental apartment for workforce housing at 2732 Doncaster Drive, valued at $1.1 million.
In the City of Langford, VICA member Verity Construction led building permits issued for single family dwellings with suites but the most notable construction start in the fourth quarter was the six-storey, 78-unit ‘Orono at Jacklin’ apartment building valued at $7 million. In the City of Colwood, a foundation permit was issued for the City Centre Park Stadium Expansion; the contract was awarded to Verity.
Major projects in the Nanaimo Regional District in the fourth quarter of 2018 include construction of a three-storey commercial building in the second phase of University Village, valued at $2.19 million, and construction of a five-storey, multi-family development on Island Highway valued at $7.5 million.
During the fourth quarter of 2018, total investment spending at $140.9 million was 11 per cent lower than it was during the fourth quarter of 2017; however, total spending on non-residential buildings was nine per cent higher in 2018 than it was the year prior. Investment spending on non-residential building construction in the Vitoria CMA increased 11 per cent in January to November over the same period last year. Non-residential building construction costs crept up five per cent during this period.
“With the island’s economy expected to expand at a slower pace in 2019 and the housing market to slow in response to tighter mortgage credit conditions, construction activity will likely follow with dampened activity,” said Kulmala. “However, population growth is expected to remain elevated, which will help fuel the market for construction.”
For 2019, the industry is optimistic that activity will continue, although at a slower pace.