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Residential construction investment
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The total value of residential construction investment reached $19.8 billion in the first quarter of 2008, an increase of 7.5% compared with the first quarter of 2007. Increases seen in most provinces and for the three components of residential construction (new housing construction, renovations and acquisition costs) explained this quarterly increase.
The favourable job situation, growth in disposable income, flexible financing options and the strength of the economy in Western Canada continued to support the demand for housing. The increase in investments depends upon the rise in the price of houses. The New Housing Price Index (house-only component) increased by 6.0% in the first quarter of 2008 compared with the same quarter in 2007.
New housing investment increased by 8.8% compared with the first quarter of 2007 to $9.7 billion. Investment in apartment and condominium construction contributed the most (in dollars) to the increase in this component. Spending on apartments increased by 17.5% to $2.6 billion. Construction spending on single-family housing rose by 3.7% to $5.6 billion. The increase for single-family housing stemmed exclusively from prices, whereas the one for apartments was mainly linked to new construction starts.
In constant dollars, investment in new apartments and condominiums increased 6.4%, while spending on the construction of new single-family homes dropped 1.1%.
Renovation spending came to $8.4 billion, a 7.2% increase compared with the first quarter of 2007. Renovation spending represented 42.4% of total residential construction investments. Acquisition costs rose 1.3% to $1.7 billion.
The biggest increases (in dollars) in residential investment occurred in British Columbia (+21.2% to $4.0 billion), Alberta (+9.1% to $3.5 billion) and Ontario (+4.0% to $6.9 billion). Quebec, Prince Edward Island and the three territories reported decreases.
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.
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).
Available on CANSIM: table 026-0013.
Definitions, data sources and methods: survey number 5016.
For more information, or to enquire about the concepts, methods or data quality of this release, contact Nicole Charron (613-951-0087; bdp_information@statcan.gc.ca), Investment and Capital Stock Division.
Table(s).
