What is the Commercial Market doing? Building Permits - July 2011

Building permits are typically a bellwether of future real estate market activity. Here is the latest data from Statistics Canada, analyzed by Royal Pacific Realty Group.

If you have questions or comments, please contact:
Andrew Peck, Vice-President and General Manager at apeck@royalpacific.com.

Lower Mainland-Southwest Region

Month over Month Numbers

Non-residential Permits
Total non-residential permits increased 40% to $229.3 million from $163.3 million in June.           

• Commercial permits jumped 63% to $173.7 million from $106.7 million previously.
• Institutional-government permits rose 27% to $45.8 million.
• Industrial permits fell 52% to $9.8 million from $20.5 million in June.

Residential Permits
Permit values decreased 21% to $348.4 million from $439.02 million in June.

Year over year Numbers

Non-residential Permits
Total non-residential permits were 1% higher to $229.3 million compared to $226.0 million last year. 

• Commercial permits were 5% higher.
• Industrial permits were up 5%.
• Institutional-government permits were lower by 10%.

Residential Permits

Year to date numbers

Non-residential Permits
Total non-residential permits were 24% higher at $1.2444 billion compared to $1.001 billion last year. 

• Commercial permits were 44% higher.
• Industrial permits were 21% higher.
• Institutional-government permits were down 18%.

Residential Permits
Permit values were 3% higher than last year at $2.386 billion compared to $2.310 billion.

Vancouver CMA

The Year-over-year Numbers

Non-residential Permits
Non-residential permits were up 13% to $216.5 million from $190.8 million one year ago. 

• Commercial permits were 10% higher.
• Industrial permits were 51% lower.
• Institutional-government permits were 45% higher than last year.

Residential Permits
Permit values were 4% higher to $277.8 million from $265.8 million last year. 

Analysis

The regional story

• Building permits held steady in July compared to June although there was a significant difference between the non-residential and residential sectors.  Non-residential permit surged ahead, led by commercial permits while residential permits declined – possibly the result of the HST.
• Metro Vancouver total building permits in July were at the second highest level this year behind March’s high watermark.  
• Commercial permits during July were at their second highest level this year and since November 2008.  Metro Vancouver’s commercial real estate sector is generating more investment opportunities as a result of improved market conditions. For example, another proposed office tower was recently announced for downtown Vancouver.
• Residential permits decreased after a yearly high in June with a decline in multi-unit dwellings. This market easing phase will last a few months but we see no housing recession coming because of continued low mortgage rates combined with Metro Vancouver’s economy which continues to generate jobs.

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