The number of new homes started in Greater Victoria last year surpassed 4,200, the highest rate since 1976 and one that exceeded expectations.
“Rental units were half of all housing starts in 2018 in response to heightened rental demand and low vacancy rates,” said Braden Batch, Canada Mortgage and Housing Corp. market analyst.
A total of 4,273 homes were started in 2018. Of those, 3,069 were apartments, meaning they could be either condominiums or purpose-built rental units. In December, more than 700 apartments were started, a high figure for any month, Batch said.
CMHC’s housing market outlook released in early November predicted housing starts for last year would come in between 3,400 and 3,800. But the high number of late-in-the-year starts pushed up that estimate, he said. Those later starts would likely have taken place in 2019 otherwise.
In 2017, a total of 3,862 homes started, including 2,500 multi-family units, according to the federal agency.
Batch anticipates the rate of new home construction will slow this year. The number of newcomers to the capital region is not expected to grow as quickly as in the past and employment growth is also expected to dampen. Other key factors are higher interest rates and a tougher regulatory system, including a stress test for those taking out mortgages.
“Affordability is a real challenge going forward,” he said.
Casey Edge, executive director of the Victoria Residential Builders Association, noted the number of single-family houses starts dropped to 818 in the region last year, from 896 in 2017. In 1976, when 4,233 homes were started, 1,176 were single-family.
Langford is one of the few municipalities that saw a significant increase in the number of single-family houses started — 261 in 2018, up from 250 in 2017.
Edge, who favours amalgamation and regional planning, said Langford allows houses to be built on smaller lots than some other municipalities, making it more financially feasible to build a single-family house.
Young families are being shut out of the single-family housing market, he said.
In Saanich, for example, a property with an older home could be assessed at more than $1 million, with just $100,000 of that represented by the actual building and the remainder reflecting the land value. “It’s common,” he said.
