CMHC reports housing starts are up 8.2% year-to-date (Jan to Nov) from 4,172 in 2021 to 4,517 in 2022. November’s new homes were 599 vs 347 in 2021.
However, the increase is in apartments/condominiums at 16.5%. These projects were already in the hopper in spring of this year when interest rates were low and sales were strong.
New single detached homes have declined from 768 to 639, down 16.7% and “missing middle” such as townhomes declined 3% from 453 in 2021 to 438 this year. Missing middle housing is considered more suitable and affordable for young families.
During this time of rising interest rates, supply chain challenges and rising costs, large multi projects such as condos can take advantage of economy of scale, however it has been reported that even these large developers may be putting projects on hold due to eroding market conditions such as the rising mortgage stress test, now at about 8%.
New, missing middle housing continues to be missing in Saanich, Central Saanich, Oak Bay, North Saanich, Metchosin, Highlands. The development approval process and costs for a small subdivision are similar to a large multi-family project, so municipalities actually discourage small projects suitable for families.
Despite the lack of missing middle housing, Saanich council is considering adding up to $21,500 to the cost of a new townhome. The municipality is the slowest in the region for approvals and appears oblivious to the rising costs of construction and mortgages. In addition, Oak Bay’s 25 “new homes” this year would be mostly replacement of existing, older homes. They have zero new townhomes or apartment/condos. They add virtually nothing to housing supply.
BC also launched a stand-alone Ministry of Housing, however the reason housing is usually part of the Ministry of Municipal Affairs in most provinces, is that municipalities control housing supply, via rezonings and permits. We will see if this new ministry is effective.