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Residential construction investment
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Residential construction investment totalled $20.8 billion in the second quarter, up 8.5% from the $19.2 billion invested in the second quarter of 2005. This substantial growth was due to increases in all three components of residential construction (new homes, renovations and acquisition costs).
Since the start of 2006, residential construction investment has totalled $37.7 billion, up 9.2% compared with the same period of 2005.
Mortgage rates that remained relatively advantageous, high employment and a robust housing market in Western Canada are among the factors that stimulated housing demand. Rising prices for new homes also contributed to the increase in the level of residential construction investment.
Expenditures on new home construction totalled $10.4 billion in the second quarter, up 9.8% from the same quarter of 2005. The largest contribution to this growth (in dollars) came from increased spending on the construction of new single-family homes (+8.9% to $6.5 billion). Investment in new apartment/condominium construction also rose substantially (+14.3% to $2.3 billion).
Spending on renovations to existing dwellings totalled $8.6 billion in the second quarter, up 8.1% from the same quarter in 2005. Acquisition costs rose 3.4% to $1.8 billion.
At the provincial level, Alberta and British Columbia stood out sharply from the other provinces. Compared to the second quarter of 2005, investment expenditures in Alberta climbed 35.9% to more than $3.1 billion. This growth was driven by strong demand for new single-family housing (+46.3% to $1.6 billion). In British Columbia, the 22.5% increase was due to increased spending on new single-family housing but also to increased investment in apartments and condominiums.
Excluding Alberta and British Columbia from the national total, the increase in residential construction investment between the second quarters of 2005 and 2006 was only 1.5% instead of 8.5%.
The steepest decline occurred in Quebec, where investment fell 3.1%.
Note: Residential construction investment is divided into three main components. The first is new housing construction, which includes single dwellings, semi-detached dwellings, row housing and apartments, cottages, mobile homes and additional housing units created from non-residential buildings or other types of residential structures (conversions).
The second component of residential construction investment (renovations) includes alterations and improvements in existing dwellings. The third component is acquisition costs, which refers to the value of services relating to the sale of new dwellings. These costs include sales tax, land development and service charges, as well as record-processing fees for mortgage insurance and the associated premiums.
Available on CANSIM: table 026-0013.
Definitions, data sources and methods: survey number 5016.
Because ownership transfer costs are not included in the investment totals presented in this release and in CANSIM table 026-0013, the figures here do not match the figures published in the National economic accounts (CANSIM table 380-0010).
For more information, or to enquire about the concepts, methods or data quality of this release, contact Étienne Saint-Pierre (613-951-2025; bdp_information@statcan.gc.ca), Investment and Capital Stock Division.
Table(s).
