Greater Victoria housing starts year-to-date are ahead of last year, but one analyst predicts numbers will soften as the year progresses.
“I don’t think that the economics of construction have caught up to the housing start numbers,” Casey Edge, executive director of the Victoria Residential Builders Association, said Tuesday.
The higher costs seen recently are not being reflected in the number of units being developed right now, he said.
Increased costs are hitting construction of single-family detached houses, townhouses and duplexes harder than large multi-family condominiums, which can rely on economies of scale, he said.
Inflation, difficulty in obtaining rezoning in some municipalities and more stringent step codes for single-family houses, townhouses and duplexes compared to large condos are other factors likely to lead to fewer starts, Edge said.
In 2022, a total of 4,787 units of housing of all types were started in Greater Victoria, down marginally from 2021 when there were 4,809 units built.
Last year saw a 21 per cent decline in single family housing to 679 in 2022 from 860 the previous year.
At the same time, multi-family units climbed by four per cent.
Edge isn’t estimating what total starts will be for this year, only saying that he expects that the number will decline from 2022 as single-family and duplex and townhouse construction shrinks.
For the first quarter of this year, from January through March, a total of 1,088 homes were started. Of those, 950 were apartment-style units, while single-family accounted for 82, and townhouses and duplexes came in at 42, according to the Canada Mortgage and Housing Corp.
The first three months of 2022 saw 820 housing starts.
As usual, the West Shore was the powerhouse regionally, with a total of 583 starts getting underway. The majority, at 489, were apartment-style units, the federal agency said.
There were 325 homes started in March, along with 291 apartment units, 28 single-family and six townhouses/duplexes.
Last March saw 121 housing starts.
CMHC said last week that in some Canadian communities, seasonally adjusted starts began declining at the end of last year and continued into early this year. It anticipates that the rise in interest rates will probably see construction slow in more areas this year, despite the strong demand for housing.
