Canadian building permits saw a significant decline in March, according to data released by Statistics Canada on Monday. The total value of permits fell 11.7% compared to February, reaching a seasonally adjusted C$10.53 billion. This drop was steeper than the 4.3% decrease anticipated by economists.
This decline follows a 9.3% increase in February and marks a 15.2% decrease year-over-year. However, the first quarter of 2024 still showed a modest gain of 3.7% compared to the previous quarter.
Building permits are an indicator of future construction activity. It's important to note that a permit being issued doesn't guarantee immediate construction.
Housing Starts Also Show Decline
Data from Canada Mortgage and Housing Corporation (CMHC) revealed a 7% decrease in housing starts for March. The six-month trend indicates a 1.6% decline overall. CMHC forecasts a decrease in housing starts for 2024, following record highs in recent years. This is likely due to the impact of rising interest rates on new construction.
Residential and Non-Residential Sectors Breakdown
The value of residential building permits in March fell 16.7% compared to February, reaching C$4.0 billion. Permits for both single-family and multi-family dwellings saw declines of 7.4% and 9%, respectively.
Looking at the first quarter, residential permits edged up 1.8%. Growth in multi-unit permits was offset by a decrease in single-family home permits.
The non-residential sector, on the other hand, showed a 6.9% increase in permit intentions. This growth was driven by commercial building, which reached its highest level in the past four quarters, with a surge in permits for office buildings.
Impact on Kelowna Real Estate Market
A decrease in building permits nationally can influence the Kelowna real estate market in a few ways. A decline in permits suggests a slowdown in new construction, which could tighten housing supply in the long term. This, in turn, could put upward pressure on housing prices, particularly for single-family homes, which saw a steeper decline in permits compared to multi-unit dwellings.
Coldwell Banker Horizon Realty will continue to monitor these trends and provide updates on how they, along with local data, impact the Kelowna market conditions.
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The content of this article is for informational purposes only and should not be considered as financial, legal, or professional advice. Coldwell Banker Horizon Realty makes no representations as to the accuracy, completeness, or suitability of the information provided. Readers are encouraged to consult with qualified professionals regarding their specific real estate, financial, and legal circumstances. The views expressed in this article may not necessarily reflect the views of Coldwell Banker Horizon Realty or its agents. Real estate market conditions and government policies may change, and readers should verify the latest updates with appropriate professionals.
