housing
(RE)START YOUR ENGINES
Housing starts are up—way up in the case of the ownership market—as construction activity recovers from the depths of the early pandemic.
The Great Suppression—that is, the state of our suppressed economy in response to the pandemic—had differential impacts on the various sectors of our economy based largely on the degree of in-person human interaction required. This is why our population-serving businesses—think retail shops, hotels, restaurants and cafes, and hair salons, to name a few—were hit the hardest by the implementation of social-distancing restrictions. Other sectors, including office- based roles that could leverage technology remotely, have clearly been less impacted by the pandemic insofar as maintaining “business as usual” is concerned. In addition to the sectors listed above that were hit hardest by the pandemic, and very unfortunately for the sake of housing market balance here in Metro Vancouver, residential construction activity was greatly subdued generally and in some places halted.
The reasons were twofold: one, the logistics of coordinating the multitude of people and trades on building sites while adhering to social-distancing protocols were extremely challenging; and two, the uncertainty around Covid and what it would ultimately mean for our economy and housing market meant that some developers decided to hit pause before embarking on new projects. That is now in the past. While owned housing starts between January and July 2020 were 38% below their 2019 year-to-date level, 2021 has seen the number of starts in the first seven months of the year surge by 51%, up to 13,401. A similar pattern can be seen in the rental segment of the market, with purpose- built rental starts year-to-date in 2021 up by 33% from last year (to 3,968). With the need to expand housing supply in this region sitting atop of many lists pertaining to making housing more affordable, the rebound in construction activity is both necessary and a relief.
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