Canadian municipalities issued $7.5 billion worth of building permits in August, down 5.5% from July. This was the second consecutive monthly decrease. Despite these declines, the year-to-date value of building permits (January to August) is up 8.7% compared with the same period in 2016, reflecting a $3.1 billion increase in multi-family dwellings.
The rise of the high rise
Total construction intentions for multi-family dwellings in Canada declined in August, down 6.0% from July. However, the sector has been on an upward trend since 2009.
This upward trend has gradually closed the gap between the value of multi-family dwellings and single-family dwellings. June 2017 was the first month where the value of multi-family dwelling permits for Canada surpassed the value of single-family dwelling permits. Overall, the multi-family component was $294.3 million higher than the single-family component in June, and $8.1 million higher in July.
Montréal and Vancouver are building upwards with multi-family dwellings
The value of multi-family permits in the census metropolitan area (CMA) of Montréal outpaced single-family permits by $278.0 million in August, the greatest value difference between these two components on record for this CMA. Historically, multi-family permits have posted higher values every month since December 2010.
Similarly, the value of multi-family permits in the CMA of Vancouver topped single-family permits by $236.0 million in August, and by $425.3 million in July. For both months, construction intentions in the City of Vancouver were the main contributor to the total value of multi-family dwelling permits.
Population density may be driving this development. Results from the 2016 Census (census subdivision [municipalities] with 5,000-plus population) show the City of Vancouver as having the highest population density in the country, with a rate of 5,492.6 people per square kilometre. As for the City of Montréal, it ranks near the top, with a population density of 4,662.1 people per square kilometre. With little space to ‘grow out’, construction intentions in these municipalities have continued to favour ‘growing up’ with multi-family dwellings being constructed in order to fulfill housing needs.
Toronto split between single-family and multi-family dwellings
The Toronto CMA has not followed the multi-family trend to the same extent as Montréal and Vancouver. The value of permits for single-family dwellings outpaced the value of multi-family dwellings in 2015 and 2016. However, based on the year-to-date value for 2017, the multi-family component has led the residential sector with just over 50% of the total value.
Provincial pattern
In British Columbia, the value of permits for multi-family dwellings has outpaced single-family dwellings every year since 2012. So far this year, the multi-family component has exceeded the value of the single-family component by more than $1.6 billion.
In Quebec, the value for multi-family permits has led the residential sector every year since 2013. Thus far, in 2017, Quebec municipalities have issued $3.8 billion worth of multi-family permits, almost $1 billion more than the single-family component.
In contrast, the value of single-family permits in Ontario has led the residential component every year, and for year-to-date 2017, the single-family component has surpassed the multi-family component by $2.1 billion.
Within the Prairie and Atlantic regions, the value of permits for single-family dwellings continues to lead the residential sector each year. In August 2017, the value of single-family dwelling permits led the residential sector by $180.3 million in Alberta, $32.2 million in Saskatchewan and $27.7 million in Manitoba. However, for the current month, the value of multi-family permits in Nova Scotia led the residential sector by $3.3 million, bolstered by activity in the CMA of Halifax.
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Dean Popplewell
He has a deep understanding of market fundamentals and the impact of global events on capital markets.
He is respected among professional traders for his skilled analysis and career history as global head
of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean
has played an instrumental role in driving awareness of the forex market as an emerging asset class
for retail investors, as well as providing expert counsel to a number of internal teams on how to best
serve clients and industry stakeholders.
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