Housing Starts Decline in 2024 But Near Median

According to CMHC, 2024 has started with a 61% decline in Greater Victoria housing starts in January. The total is 182 in 2024 vs 463 in 2023. In 2022, the total was 286 new homes. December 2023 totals were 644, however 2023 was a record year for new housing.

So far this year, there are 152 large multi-family projects, 11 single family and 17 townhomes, duplex, etc also known as “missing middle.”  There has been a big shift to large multis due to high construction costs, government fees, taxes and regulations, and high interest rates. So the monthly housing data will be skewed based on the timing/appearance of these large projects.

In light of these changes, we reviewed the January housing starts over the past ten years and discovered this year is not far off the median number. To calculate the median, the year with the highest starts (2023) and the lowest (2020 pandemic) are removed creating a total of 193.5. This year still represents a 6% decline but there are 11 months to go and interest rates may soften in late spring.

Most of the new housing was in Saanich (71), View Royal (69), Colwood (15) followed by Langford (14). Of significant concern is Langford at 14 new homes, when last year in January they posted 319. Apparently Langford permit approvals have dropped off, however more data in the upcoming months is necessary to draw any conclusions. Many municipalities posted zero starts in January. We know Statistics Canada reports a 16% decline in the value of building permits in our region in December 2023.

It’s likely housing starts will drop this year, and perhaps we revert to our median or average. But that won’t address supply and affordability issues as our population grows rapidly. Even though 4,992 was a record number in 2023, it’s not a record relative to our population growth. Victoria’s population in 1972 was 192,000 with record high housing starts of 4,192. In 2023 Victoria’s population is about 400,000 with record housing starts of 4,992. Relative to the different populations, that’s still a decline of 43% in 2023 vs 1972.  

The BC government recently announced mandatory rezonings and housing targets for some municipalities, however they also increased Development Cost Charges by including police & fire stations, sold waste treatment facilities and highways in addition to the already covered sewer and water, sidewalks, parks, etc. Previously negotiated Community Amenity Contributions were legalized like DCCs, and this will also add costs to housing. The CRD plans to add water charges of $9,045 per new single family home and $7,914 for townhomes, duplexes etc of which there is already a shortage. More charges will be applied to large multi-family projects. There needs to be a cap on rising fees and regulations.

In addition, the BC government announced a new program called BC Builds, however these programs are ineffective at addressing market housing supply and affordability for the general population.

They should start by changing the Property Transfer Tax from a tax to a title transfer fee like Alberta.