December 2007
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The value of building permits hit another record high in 2007, thanks to widespread strong gains across Canada and in both the residential and non-residential sectors.
Municipalities issued $74.3 billion worth of building permits in 2007, up 12.1% from the previous record of $66.3 billion in 2006.
While the gain in 2006 was largely fuelled by the tremendous demand in Western Canada, the increase in 2007 was more widespread across the country. Every province posted gains with the exception of Prince Edward Island and Nova Scotia.
In Quebec, the rate of growth accelerated from 5.2% in 2006 to 9.2% in 2007. In Ontario, the value of permits rebounded from a 3.5% decline in 2006 to a 14.7% increase in 2007, a faster rate of growth than the 12.8% gain in Alberta.
Regionally, 21 out of the 34 census metropolitan areas posted increases in their annual total value of construction projects. After recording the largest decline in 2006, Toronto rebounded significantly in 2007 to post the largest gain (in dollars) by far among metropolitan areas. Calgary came second followed by Montréal, Vancouver and Edmonton.
Intentions set new records in both the non-residential and residential sectors. In the non-residential sector, the value of permits totalled $28.7 billion, up 13.8% from $25.2 billion in 2006. All three components (industrial, commercial and institutional) recorded strong growth.
In the housing sector, municipalities issued $45.6 billion worth of permits, up 11.0%. Higher construction prices for new dwellings contributed significantly to the gain, as the number of new dwellings approved increased 2.0% in 2007 to 237,875 units.
This result contrasted sharply with the situation in the United States, where the number of new privately-owned units approved fell by 25.3% in 2007.
On a monthly basis, municipalities issued $6.1 billion worth of building permits in December, a marginal 0.4% gain from November.
The number of multi-family units approved in 2007 totalled 121,170 units, up 6.1% from 2006 and the highest level since 1977. In contrast, the number of single-family units approved declined 2.0% to 116,700 units.
The high price tag on the construction of single-family dwellings in several centres contributed to shift the demand toward multi-family dwellings.
The share of multi-family dwellings went from 48.9% in 2006 to 50.9% in 2007. It was the highest proportion since 1982 when they represented 51.5% of all units.
The value of multi-family permits increased 16.0% to $16.7 billion, while the value of single-family permits rose 8.3% to $28.9 billion.
The strong level of employment, the increase in the disposable income, tight apartment vacancy rates in several centres and attractive financing options continued to stimulate the housing sector in 2007.
Commercial projects fuelled most of the increase in the non-residential sector in 2007. Construction intentions in both commercial and institutional sectors hit record highs, while industrial permits were at their highest annual total since 1989.
Municipalities issued $16.9 billion worth of commercial permits, up 17.1% from 2006. The increase came largely from projects for office buildings, retail complexes and hotels.
In the institutional component, the value of permits rose 10.0% to $6.9 billion. Projects for schools, hospitals and nursing homes were behind this gain.
Note to readers
This release presents seasonally adjusted monthly data, which ease comparisons by removing the effects of seasonal variations. The annual totals correspond to the sum of the unadjusted monthly figures and are preliminary.
The Building Permits Survey covers 2,380 municipalities representing 95% of the population. It provides an early indication of building activity. The communities representing the other 5% of the population are very small, and their levels of building activity have little impact on the total.
The value of planned construction activities shown in this release excludes engineering projects (for example, waterworks, sewers or culverts) and land.
For the purpose of the Building Permits release, the census metropolitan area of Ottawa–Gatineau is divided into two areas: Ottawa–Gatineau (Quebec part) and Ottawa–Gatineau (Ontario part).
The value of industrial permits increased 8.5% to $4.9 billion, fuelled largely by projects for manufacturing buildings. However, this component has been on a downward trend since September.
Declining office vacancy rates, vigorous retail sales, strong corporate profits and the increasing demand for health care and nursing home were among factors contributing to the exceptional results in the non-residential sector.
Projects for new office space played a key role in the healthy results in the non-residential sector. Without office buildings, the value of commercial permits would have increased by 10.2% instead of 17.1%.
Weak real investment in office buildings in recent years and growing employment in business, finance and administrative occupations pushed down the office vacancy rates. These low rates, in addition to the aging of the existing stock contributed to increase the demand for office space considerably.
Municipalities approved $5.3 billion in projects for office buildings in 2007, up 35.9% from 2006. Office buildings accounted for 40.0% of the overall increase in the non-residential sector.
Between 2003 and 2007, the share of the value of office building permits in the non-residential sector rose from 8.8% to 18.4%, the highest share since 1990. The value of approved projects in 2007 was more than three times higher than the level in 2003.
In the Calgary metropolitan area, municipalities approved $1.8 billion in projects for office buildings in 2007, a 56.6% gain from 2006. These represented 53.6% of the overall value of approved projects in Calgary's non-residential sector. The value of office building permits in 2007 was more than 14 times higher than the level approved in 2003.
In Toronto, $1.2 billion worth of office building projects were approved, up 52.9% from 2006. This accounted for nearly one-quarter of the total value of non-residential permits issued in 2007.
The total value of building permits reached $6.1 billion in December, a small 0.4% gain from November. A gain in housing permits more than offset the decline in non-residential construction intentions. The total value of permits peaked in May and June at $6.9 billion and has been on a downward trend in the last part of 2007.
The value of residential permits increased 1.8% to 3.9 billion, thanks to a 10.8% surge in the value of multi-family permits. The value of single-family permits declined 3.2% to $2.4 billion.
Municipalities approved 9,215 new single-family units, the second lowest monthly level over the last six years. The number of multi-family units approved increased 1.0% in December to 9,990 units.
The value of non-residential permits declined 2.0% in December to $2.2 billion.
The value of commercial permits increased 16.8% to $1.3 billion, the value of industrial permits plunged 33.2% to $319 million, and institutional permits declined 12.0% to $540 million.
The value of industrial permits recorded a fourth loss in five months and hit its lowest level since February, as permits for manufacturing buildings declined. Institutional permits fell for the third time in four months.
Four provinces registered gains in the total value of permits in December. Marked increases in British Columbia, Saskatchewan, Newfoundland and Labrador and, to a lesser extent, in Ontario offset declines in all other provinces.
In Saskatchewan, the value of permits in December reached a record high of $217 million, thanks to strong construction intentions in both sectors.
In Newfoundland and Labrador, the level in December ($104 million) was second only to the value recorded in November 2006. In Quebec, however, the monthly value of permits fell below the $1-billion mark for the first time in 10 months.