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64-001-XIE Building permits September 2003 |
Highlights
Builders took out another monthly record in residential building permits in September as the demand for single- and multi-family dwellings maintained its torrid pace. The value of housing permits rose 10.0% to a record $2.90 billion, surpassing the previous record of $2.86 billion set in July. The value of building permits, an early indicator of construction activity, points to a warm winter for residential builders. At the same time, the value of non-residential permits also advanced in September, rising 4.5% to $1.5 billion, with gains in commercial and institutional permits. It was the third increase over the last four months for the non-residential component. In total, municipalities issued $4.4 billion worth of building permits in September, up 8.0% from August. The results for the first three quarters clearly indicate that 2003 will be an exceptional year. The total value of building permits issued between January and September totalled a record $38.3 billion, up 9.3% from the same nine months in 2002. Builders took out $23.6 billion worth in residential permits, up 7.1%. The value of permits in the non-residential sector was up 13.0% to $14.7 billion. Among the metropolitan areas, the largest growths (in dollar terms) were recorded in Toronto, Montreal and Oshawa. In Montreal and Oshawa, the advances came from both the residential and non-residential sectors. In Toronto the rise came exclusively from the non-residential sector. Strong demand for single-and multi-family dwellingsThe value of single-family permits rose 12.3% to a monthly high of $1.96 billion in September, surpassing the previous record of $1.93 billion set in January. In September alone, municipalities authorized 10,900 new single units. The value of multi-family permits rose 5.5% to $940 million in September, the second highest level on record, surpassed only by the level of $985 million in July. It was the sixth gain during the last seven months for multi-family permits. About 8 500 new multi-family units were authorized in September. Among the factors that have positively affected the housing market recently are advantageous mortgage rates and their positive impact on the housing affordability; high consumer confidence; growth of more than 100,000 in full-time employment since the beginning of the year; and the tight vacancy rates in several centres. Provincially, the largest gain in September occurred in Ontario (+12.9% to $1.3 billion), due largely to a surge in the construction intentions for single-family dwellings in the Toronto area. British Columbia came second (+23.5% to $435 million) due to the increased value of multi-family permits in the census metropolitan area of Vancouver. All provinces and territories showed gains in single-family permits in September. On a year-to-date basis, the value of single family-dwellings totalled $16.3 billion, up 3.8% from the first nine months last year. The cumulative value of multi-family permits jumped 15.2% to a tremendous $7.3 billion. A shift in the demand from single-family to multi-family dwellings across the country explained this substantial growth in the multi-family component. Nationally, new multi-family dwellings authorized accounted for almost 41% of all new dwellings authorized in 2002. So far this year, they have accounted for 46%. The shift in demand has occurred in every province except for British Columbia where this proportion remained virtually unchanged. Provincially, the largest advances in residential permits, on a cumulative basis, occurred in Quebec and British Columbia. Slight rebound in non-residential projectsSeptember’s rebound in non-residential building permits, which followed a 20.4% decline in August, was led mainly by the institutional component. Institutional intentions increased 11.9% to $525 million after two straight monthly decreases. Projects in the social service and medical categories led British Columbia to the greatest increase (in dollar terms) among the provinces. The value of institutional projects in British Columbia more than doubled (+125.4% to $96 million), recording its highest value since September 2001. After two monthly declines, the value of commercial permits increased 3.6% to $773 million due to an advance in the hotel and restaurant category. The most significant increases in the commercial component occurred in New Brunswick, British Columbia and Ontario. The industrial component declined for the second straight month, falling 6.2% to $247 million. The decline was fuelled by the manufacturing and mining-agriculture categories. Following a strong month in July, Quebec showed a second double-digit monthly decrease in proposed industrial projects, cutting the value to $39 million. Sixteen of the 28 census metropolitan areas recorded monthly increases in the value of non-residential permits. By far, the largest increase occurred in Oshawa, due to a large project for a new administrative facility. In contrast, Toronto recorded the strongest decrease mainly as a result of declines in the educational and medical categories. Among the provinces, British Columbia recorded the largest gain in the non-residential sector (+49.8% to $245 million), following a sharp decrease in August. All three components showed gains, especially the institutional component. After recording the largest growth in September, Saskatchewan recorded the most significant decrease (-45.4% to $31 million), the result of decline in the commercial component. On a year-to-date basis, municipalities issued $14.7 billion in permits for the non-residential sector between January and September, up 13.0% from the same period in 2002. Gains have been the strongest in the industrial sector, where the year-to-date level was up 21.4% to $2.9 billion, as well as in the institutional sector, where intentions increased 16.2% to $4.7 billion. In the commercial component, the value of permits rose 7.9% to $7.1 billion. The robust level of non-residential construction intentions is in concordance with the increase in capital spending intentions by businesses, governments and institutions published in the latest release of the Private and public investment in Canada. The value of non-residential permits so far this year has increased in all provinces and territories except for Newfoundland and Labrador and the Northwest Territories. The largest growth was in Ontario (+9.7%), the result mainly of large increase in the three non-residential components in the census metropolitan area of Toronto. Growth in Toronto’s non-residential sector was the strongest among all metropolitan areas. The province of Quebec was second (+18.0%), powered mainly by institutional projects in Montreal and commercial projects in the Quebec City area.
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