The latest CMHC data reveal housing starts are down 25% from August 2022 to September 2022 and down 35% from September last year. Year-to-date housing starts (3,313) are down only 5% vs last year (3,488) however rising interest rates and the stress test will likely inhibit increased starts. Longer amortization periods and a more flexible stress test have been suggested by the industry to assist affordability, especially for young families.
Victoria increased new housing year-to-date from 1,181 to 1,450 of which 1,367 are apt/condos. The slow approval process and rising costs require large multi developers taking advantage of economy of scale. While the newly elected council may support regulatory initiatives for townhomes and small multiplexes known as “missing middle,” the regulatory costs tacked on, including Step Code, deconstruction regs, Community Amenity Contributions, and a myriad of other fees/demands, will make new development challenging.
Langford leads by far in the construction of single detached at 179 homes. They also lead in “missing middle” with 160 homes representing 41% of all units in the CRD.
Year-to-date, nine months into the year, there is zero new missing middle housing in Saanich, Oak Bay, Central Saanich, Highlands, Metchosin, North Saanich and only 6 in View Royal. There has been a total of only 10 new homes of any description started this year in View Royal. Oak Bay reports 21 single detached but most would be replacing existing homes adding little to new housing in the region.
The municipal elections indicate new councils are inclined to slow new development, especially in Langford, where 36% of all new homes were constructed last year and 48% of missing middle.
In addition, Saanich plans to add up to $21,500 per new townhome despite zero new missing middle homes built this year. The industry waits to see if the new mayor and council will continue on this path. Most Saanich council incumbents were returned.
The NDP government’s David Eby, running for the leadership, has said the province will mandate rezonings for missing middle housing if municipalities continue choking supply. This initiative may be required sooner than later as many councils in the CRD intend to “slow development.” This will further erode housing supply and increase prices in the highest priced province in Canada.