2018 BC Residential Building Statistics and Trends Report

2018 BC Residential Building Statistics & Trends Report

ABOUT BC HOUSING BC Housing develops and administers a wide range of initiatives supporting different housing options across British Columbia. In partnership with the private and non-profit sectors, provincial health authorities and ministries, other levels of government and community groups, BC Housing increases affordable housing solutions for British Columbians. Under the Homeowner Protection Act, BC Housing is mandated to help improve consumer protection for buyers of new homes and the quality of residential construction in the province. BC Housing fulfils this mandate by monitoring and enforcing the mandatory third-party home warranty insurance on all new homes constructed in B.C., licensing residential builders and maintaining a register of new homes and performing research and education functions to advance and promote better building and retrofit practices to benefit B.C.’s residential construction industry and consumers.

BC Housing’s Research Centre works in collaboration with housing sector partners to foster excellence in residential construction and find innovative solutions for affordable housing in British Columbia. Sharing leading-edge research, advances in building science, and new technologies encourages best practice. The Research Centre identifies and bridges research gaps to address homelessness, housing affordability, social housing challenges and the needs of distinct populations. Mobilizing knowledge and research expertise helps improve the quality of housing and leads to innovation and adoption of new construction techniques, Building Code changes, and enhanced education and training programs. Sign up to receive the latest news and updates from the BC Housing Research Centre at www.bchousing.org/subscribe. Visit www.bchousing.org to view the latest statistics or download this report. Phone: 604.439.4135 Toll-free: 1.866.465.6873 Email: research@bchousing.org Twitter: @BC_Housing

Issued September 2019

Table of Contents

Introduction ............................................................................................................................................... 1 Report Highlights ..................................................................................................................................... 2 New Home Registrations ....................................................................................................................... 4

OVERVIEW ................................................................................................................................................ 4

REGISTERED AND ENROLLED NEW HOMES ....................................................................................... 5

REGION ..................................................................................................................................................... 8

MULTI-UNIT BUILDING SIZE ............................................................................................................... 12

Licensed Residential Builders ............................................................................................................ 23

OVERVIEW .............................................................................................................................................. 23

LICENSING ............................................................................................................................................. 24

LICENSED RESIDENTIAL BUILDER SURVEY ...................................................................................... 26

Survey Methodology ................................................................................................................... 26

Survey Results ............................................................................................................................. 27

Construction Activity..................................................................................................................... 27

Builder Profile................................................................................................................................ 31

Energy Efficiency ........................................................................................................................... 33

New Residential Construction Activity Predictions...................................................................... 37

Current New Homeowners and Prospective New Home Buyers ........................................... 39

CURRENT NEW HOMEOWNERS SURVEY .......................................................................................... 39

Survey Methodology ......................................................................................................................... 39

Survey Results ................................................................................................................................... 40

Current New Homeowners - Profile .............................................................................................. 40

Current New Homeowners - Confidence about Home Purchase ................................................ 41

Current New Homeowners - Satisfaction with Home Construction ............................................ 42

Current New Homeowners - Confidence in the Housing Market ................................................. 44

PROSPECTIVE NEW HOME BUYERS SURVEY .................................................................................... 47

Survey Methodology ................................................................................................................... 47

Survey Results ............................................................................................................................. 47

Prospective New Home Buyers - Profile ....................................................................................... 47

Prospective New Home Buyers - Purchase Plan .......................................................................... 49

Prospective Home Buyers - Level of Concern Regarding Building Construction ........................ 50

Prospective New Home Buyers - Perspective on the Level of Importance of Different Factors When Purchasing/Building a Home .............................................................................................. 51

Prospective New Home Buyers - Confidence in the Housing Market .......................................... 52

Buying and Selling......................................................................................................................... 53

Market Concerns............................................................................................................................ 54

Appendix 1: Methodology ................................................................................................................... 55

NEW HOME REGISTRATION ................................................................................................................ 55

LICENSED RESIDENTIAL BUILDER SURVEY ...................................................................................... 56

CURRENT NEW HOMEOWNERS SURVEY .......................................................................................... 57

PROSPECTIVE NEW HOME BUYERS SURVEY .................................................................................... 58

Appendix 2: Glossary ............................................................................................................................. 59

Introduction

The B.C. Residential Building Statistics & Trends Report presents an analysis of new construction activities and the state of Licensed Residential Builders (LRBs) and Licensed Building Envelope Renovators (BERs). This report provides forward-looking market information and insights for residential construction professionals and homeowners seeking market intelligence and current industry trends to plan ahead and make informed decisions. Data provided in this report are collected through several channels:  All new homes in British Columbia (B.C.) must be registered with BC Housing before the issuance of building permits and construction starts. New home registration data is a leading indicator 1 of housing and economic activity in B.C., providing information on registered new homes by building type, location, and building size.

 LRBs and BERs are licensed by BC Housing. To obtain home warranty insurance, LRBs and BERs must apply for and be accepted for home warranty insurance coverage by a warranty insurance provider. Further information on both home warranty insurance and builder licensing is available on the BC Housing website.  The Licensed Residential Builder Survey is an annual province-wide quantitative survey covering the typical builder profile (industry experience, builder types), construction activities, and satisfaction and perceptions related to research and education initiatives.  The Current New Homeowners Survey and the Prospective New Home Buyers Survey are conducted every two years as part of a province- wide Consumer Survey . Results of the 2018 Consumer Survey are included in this report.

“The Trends Report is a targeted snapshot of residential development in BC with detailed, region by region, consumer data presented by building type. Industry experts will appreciate the forecast opportunity this business intelligence provides.”

Anne McMullin President and CEO Urban Development Institute

1 Bank of Canada, 2016. New Housing Registrations as a Leading Indicator of the BC Economy. Document available at: htp://www.bankofcanada.ca/wp-content/uploads/2016/02/sdp2016-3.pdf

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2018 Residential Building in BC

46 , 463 Total new registered homes

35,086 New homes in multi-unit buildings

Home Registration Data

up 17.8%

up 9.7%

Where builders work by region 3 % Central/ Northern BC

Builder Data

7,916 Licensed Residential Builders Building Envelope Renovators 80

10 % Okanagan

15 % Southern Islands 69 % Lower Mainland

3 % Kootenays

Consumer Data

What type of home do new home buyers want?

What do prospective new home buyers plan to purchase ?

26 % previously owned home

5 % custom built

60 % homes built by a builder/ developer

43 % single detached

28 % condominium

unsure 8 %

27 % townhouse or duplex

7,334 Purpose-built rentals

11,377 New single-detached homes

2nd highest year on record after 2017

down 9.4%

Builders by building type

29 % of builders expect an increase in their construction activity

97 % built single-

detached homes

2 % built multi-unit high rise

98 %

of new homeowners feel confident knowing their home was built by a licensed residential builder

New homeowners are satisfied with the construction of their home

85 %

New Home Registrations

2018 Highlights  Nearly 46,500 new homes were registered, the highest recorded since 2002  More than 7,300 purpose-built rentals were registered in 2018, the second highest recorded since tracking began in 2002  Approximately 3 out of 4 (76%) new homes were in multi-unit buildings, which is higher than the 2017 peak of 70%  Roughly 3 out of 5 (60%) registered new homes in BC were in located in Metro Vancouver and the region reported its highest number of new homes to date

OVERVIEW

Under the Homeowners Protection Act , all new homes in B.C. must be registered with BC Housing prior to the issuance of building permits and housing starts. Data is collected based on the information provided by Licensed Residential Builders (LRBs) and owner builders through the New Home Registration forms and Owner Builder Authorization applications respectively. In addition to registration, single detached and multi-unit homes constructed by LRBs are required to be covered by home warranty insurance in B.C. Over time minor adjustments may be made to new home registration data as registrations are withdrawn or cancelled from home warranty insurance. BC Housing tracks registration of four different home types: single detached and multi-unit homes enrolled in home warranty insurance, homes constructed by an owner builder not covered by home warranty insurance, and purpose-built rental units that are exempt from home warranty insurance.

“ As Director of the Housing Research Collaborative, I know that access to this type of public information is invaluable for housing researchers, policymakers and planners. The new homes registration data supports evidence- based approaches to understanding the housing system and developing innovative solutions along the housing continuum.”

Penny Gurstein, Director Housing Research Collaborative University of British Columbia

Registered new homes in multi-unit buildings (two or more dwelling units) include new homes enrolled with home warranty insurance and new homes in multi-unit rental buildings with a home warranty insurance exemption. Registered new single detached homes are new homes enrolled with home warranty insurance or with an Owner Builder Authorization issued by the Registrar of BC Housing.

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REGISTERED AND ENROLLED NEW HOMES

The annual number of registered new homes in 2018 was the highest recorded since reporting began in 2002. The number of registered new homes 2 in B.C. reached 46,463 in 2018, including 35,086 homes in multi-unit buildings 3 and 11,377 single detached homes 4 . The total number of registered homes was up 9.7% from 2017. Registration growth was driven by an increase in the multi-unit segment (+17.8%) while single detached home registrations decreased 9.4%. Homes in multi-unit buildings accounted for 75.5% of all registered new homes in 2018, higher than the 2017 peak of 69.5%. Of the 35,086 multi-unit homes registered in 2018, 79.1% (27,752) were multi-unit homes enrolled in home warranty insurance, while 20.9% (7,334) were purpose-built rental units. 5 The number of purpose-built rental units was the second highest number of rental units recorded since tracking began in 2002, with 2017 having the most purpose-built rental units on record.

Figure 1: Share of Registered New Homes by Building Type, 2018

24.5%

76%

Multi-units

75.5%

Multi‐unit Registered Single Detached Registered

Figure 2: Number of Registered New Homes by Building Type (2002-2018)

50,000

46,463 

40,000

30,000

20,000

10,000

0

Single Detached Homes

Homes in Multi-unit Buildings

Total

2 Over time minor adjustments may be made to the figures as registrations are withdrawn or cancelled. New home registration data is accurate as of January 2, 2019. 3 Calculations of “registered new homes in multi-unit buildings” include new homes in multi-unit buildings (two or more dwelling units) enrolled with home warranty insurance, and new homes in multi-unit rental buildings which are exempt from home warranty insurance. 4 “Registered new single detached homes” refers to new single detached homes enrolled with home warranty insurance or with Owner Builder Authorizations issued by the Registrar of BC Housing. 5 The total number of purpose built rentals does not include all rental units constructed since rental units that are enrolled in home warranty insurance would be included in the multi-unit registered total.

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The number of homes enrolled in home warranty insurance in 2018 was the highest since the inception of mandatory home warranty insurance in 1999. In 2018, homes enrolled with home warranty insurance accounted for 81.7% of registered new homes, followed by purpose-built rentals (15.8%), and owner-built homes (2.5%). The total number of new homes enrolled with home warranty insurance was 37,956 in 2018, an increase of 14.9% from 2017. At 15.8%, the proportion of purpose-built rental homes is the second highest recorded since 2002 with 2017 having the highest proportion on record (20.9%).

Figure 3: Share of Homes Enrolled in Home Warranty, Owner-built Homes and Purpose-built Rental Homes, 2018

15.8%

2.5%

82%

enrolled in home warranty

22.0%

59.7%

Multi‐unit Homes Enrolled Single Detached Homes Enrolled Owner Built Homes Purpose‐built Rental Homes

Figure 4: Homes Enrolled with Home Warranty, Owner-built Homes and Purpose-built Rental Homes (2002-2018)

 10,000  15,000  20,000  25,000  30,000  35,000  40,000  45,000  50,000

46,463 

 ‐  5,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Multi‐unit Homes Enrolled

Single Detached Homes Enrolled Purpose‐built Rental Homes

Owner Built Homes

Total Registered New Homes

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For multi-unit enrollments by warranty provider in 2018, Travelers Canada represented the largest market share (47.9%), followed by Aviva through National Home Warranty (25.8%) and RSA Canada represented by WBI Home Warranty (20.7%).

Figure 5: Market Share of Multi-unit Homes Enrolled by Warranty Provider (2012-2018)

2012 2013 2014 2015 2016 2017 2018

13,522 

7,295 

5,843 

11,290 

4,576  4,847 

3,707 

14,836 

2,676 

9,218 

5,757 

2,421 

9,129 

4,042 

2,498  1,652 

10,835  9,429 

3,077 

2,657 

1,841 

 ‐

 5,000

 10,000

 15,000

 20,000

 25,000

 30,000

Aviva (National Home Warranty)

Echelon (Pacific Home Warranty) RSA Canada (WBI Home Warranty)

Travelers Canada

Echelon, represented by Pacific Home Warranty, had the largest market share (35.0%) in single detached home enrollments in 2018, followed by Aviva, through National Home Warranty (32.6%), Travelers Insurance Company of Canada (25.6%), and RSA Canada represented by WBI Home Warranty Ltd. (6.8%). 6

Figure 6: Market Share of Single Detached Homes Enrolled by Warranty Provider (2012-2018)

2012 2013 2014 2015 2016 2017 2018

3,400 

3,655 

2,667 

4,029 

3,964 

3,189 

3,823 

3,194 

3,255 

3,119 

2,593 

2,701 

3,503 

2,457 

2,557 

2,658 

1,627 

1,960 

2,876 

1,698 

2,180 

 ‐

 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Aviva (National Home Warranty)

Echelon (Pacific Home Warranty) RSA Canada (WBI Home Warranty)

Travelers Canada

6 Over time minor adjustments may be made to the figures as registrations are withdrawn or cancelled. Warranty share data is accurate as of January 2, 2019.

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REGION

In 2018, approximately 80.4% of registered new homes in B.C. were located in Metro Vancouver, the Capital Regional District, the Central Okanagan Regional District, and the Fraser Valley Regional District. Metro Vancouver accounted for 60.2% of all registered new homes in B.C., followed by the Capital Regional District (9.1%), Central Okanagan Regional District (5.8%), and Fraser Valley Regional District (5.2%). Of the top four regional districts, Metro Vancouver experienced the highest growth in new home registrations at 7.7% between 2017 and 2018. Much of the growth in Metro Vancouver was driven by an increase in multi-unit registrations (11.2%) and the region reached a new peak in both multi-unit registrations and total registrations. The Fraser Valley Regional District experienced a 6.4% overall increase in new home registrations, which was driven by growth in multi-unit registrations (56.9%). The Capital Region District experienced an overall increase in new home registrations (5.7%) and reached a new peak in both multi-unit registrations and total registrations. Across the Capital Region District, multi-unit registrations grew by 8.4%. In the Central Okanagan Regional District, new home registrations declined overall (-5.6%) which was due to the 23.7% decrease in single detached registrations. During the same time period, multi-unit registrations increased slightly (2.5%) in the Central Okanagan Regional District. All four top regional districts experienced growth in multi-unit registrations and a decline in single detached registrations between 2017 and 2018.

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Figure 7: Registered New Homes by Regional District, 2018

Regional District

Number of Single Detached Homes Regional % Share of Provincial Total

Number of Homes in Multi-unit Buildings Regional % Share of Provincial Total

Population Regional % Share of Provincial Total

Metro Vancouver 4,704 41.3%

2,558,029 53.8%

23,266 66.3%

 10,000  15,000  20,000  25,000

 ‐  5,000

Central Okanagan 678 6.0%

Capital

2,037 5.8%

197,075 4.1%

3,269 9.3%

958 8.4%

382,645 8.1%

 1,000  1,500  2,000  2,500  3,000  3,500

 1,000  1,500  2,000  2,500

 ‐  500

 ‐  500

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Figure 8: Registered New Homes by Building Type and by Selected City (2002-2018)

Homes in Multi‐unit Buildings 

Single Detached Homes

Burnaby

Surrey

Vancouver

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Victoria

North Vancouver

Richmond

1,000 1,500 2,000 2,500 3,000 3,500 4,000

1,000 1,500 2,000 2,500 3,000 3,500 4,000

1,000 1,500 2,000 2,500 3,000 3,500 4,000

0 500

0 500

0 500

Coquitlam

Langley

NewWestminster

1,000 1,500 2,000

1,000 1,500 2,000

1,000 1,500 2,000

0 500

0 500

0 500

Kelowna

Abbotsford

Nanaimo

1,000 1,500 2,000

1,000 1,200 1,400

1,000 1,200 1,400

0 200 400 600 800

0 200 400 600 800

0 500

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Port Coquitlam

Maple Ridge

Chilliwack

1,000 1,200 1,400

1,000 1,200 1,400

1,000 1,200 1,400

0 200 400 600 800

0 200 400 600 800

0 200 400 600 800

Squamish

Kamloops

Prince George

0 100 200 300 400 500

0 100 200 300 400 500

0 100 200 300 400 500

Fort St John

Duncan

Campbell River

0 100 200 300 400 500

0 100 200 300 400 500

100 200 300 400 500

‐100 0

Cranbrook

Kitimat

Terrace

150

150

150

100

100

100

50

50

50

0

0

0

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MULTI-UNIT BUILDING SIZE

Of the 2,158 multi-unit buildings that were registered in 2018, duplexes were the most popular multi-unit building size (32.5%), followed by buildings with 5 to 50 units (31.1%) and quadplexes (18.6%). A total of 701 duplexes were registered, which is a 3.9% increase over 2017. The largest increases between 2017 and 2018 were in buildings of 51 to 100 units (31.7%), followed by buildings over 100 units (23.2%) and buildings of 5 to 50 units (16.1%). Triplexes were the only building size to see a decline, falling from 182 buildings in 2017 to 167 buildings in 2018 (-8.2%).

“A true market-leading indicator, the New Homes Registry data and reports are an invaluable resource for our members when looking to plan and forecast their projects moving forward.”

Ron Rapp, CEO, HAVAN Homebuilders Association Vancouver

Figure 9: Registered New Multi-unit Buildings by Building Size in B.C. (2002-2018)

 2,500

85

133

 2,000

532  576 

553 

562 

671

408 

 1,500

625 528

342  405 

337 

359 

387 

330 

343 

583 

146 

474  428 

395  385 

157 

170 

348 401

 1,000

109  228 

161 

129 

333 

254 

256 

206  248  193  217 

132  191 

121  239 

139 

145 177 167

162 

128 

90 

94 

117 

1,055 960 

61 

 500

83 

874  939  861 

740 

667 

504  622 664 701

434  548  561  555  488 

478 

 ‐

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Duplex

Triplex Quadplex

5‐50 Units

51‐100 Units >100 Units

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By number of units, buildings with more than 100 units accounted for 32.1% of the total units registered with 14,936 units, followed by buildings of 51 to 100 units (20.2%) and buildings of 5 to 50 units (15.6%). The number of units in buildings of 51 to 100 units increased 30.9% between 2017 and 2018, while buildings of 100 units or more increased 24.7%. The number of units in triplexes declined 8.2%.

“National Home Warranty relies on BC Housing’s insightful, data-driven market analysis to strengthen our risk portfolio. It is an effective tool to assist in prospecting, qualifying, and retaining BC’s top builders and developers.”

Colleen Wilson, President National Home Warranty

Figure 10: Registered Units in New Multi-unit Buildings by Building Size in B.C. (2002-2018)

 40,000

14,936 

 35,000

12,470 

 30,000

13,438 

8,311 

7,171 7,453 

 25,000

9,323 

6,766 

7,763 7,884 

5,353 

 20,000

8,306 

2,371 

4,267 5,849 

5,523 

9,384 

 15,000

6,244 5,993 7,382 

7,169 

5,133 

5,329 

4,209 

5,175 

4,884 

 10,000

3,758 

2,426 

3,278 2,729 4,230 3,810 

2,718 

5,725 6,671 8,166 7,362 7,278 

5,451 

2,659  1,787 

 5,000

5,239 4,280 4,947 4,538 4,394 6,045 6,412 6,916 7,259 

4,173 

 ‐

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Duplex

Triplex Quadplex

5‐50 Units

51‐100 Units

>100 Units

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The unit-building ratio measures the average size of registered multi-unit buildings by calculating the number of new units per building. B.C.’s unit-building ratio experienced an increase from 13.9 to 16.3 between 2013 and 2018, surpassing the 2017 peak of 15.2. Over the past few years, the higher unit-building ratios are typically found in Metro Vancouver, the Capital Regional District and the Central Okanagan Regional District. However, only Metro Vancouver had a unit-building ratio that was higher than the provincial average of 16.3 in 2018. In Metro Vancouver, the ratio was 20.8, the highest since the 2002 peak of 21.1. Metro Vancouver is also the region which consistently has a unit-building ratio that is higher than the provincial average. In 2018, the Squamish-Lillooet Regional District had a unit-building ratio of 17.4 which was higher than the provincial average. This was driven by the registration of 45 new multi-unit buildings, including two buildings with over 100 units and five buildings with 51 to 100 units.

Figure 11: Unit-Building Ratios (2002-2018)

Capital Region District 

Metro Vancouve r 

10.0 15.0 20.0 25.0 30.0

10.0 15.0 20.0 25.0 30.0

20.8

16.2

16.2

14.7

0.0 5.0

0.0 5.0

BC

Metro Vancouver

BC

Capital Regional District

Squamish‐Lillooet

Central Okanagan

30.0

30.0

25.0

25.0

20.0

16.2 17.4

20.0

16.2

15.0

15.0

10.0

11.8

10.0

5.0

5.0

0.0

0.0

BC

Central Okanagan Regional District

BC

Squamish‐Lillooet Regional District

In 2018, three regional districts had higher than average unit-building ratios that were driven by the registration of only one or two buildings – the Regional District of the East Kootenay (61.0, one rental building), the Regional District of Central Kootenay (28.5, two rental buildings) and the Cariboo Regional District (20.5, one rental building and one duplex).

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In total, there were 12 communities in B.C. with unit-building ratios of 30 or higher in 2018. Comox had the highest unit-building ratio (84.0), followed by Colwood (77.3) and Sicamous (73.0) .

Table 1: Selected Communities in B.C. with High Unit-Building Ratios, 2018

City

Number of Buildings

Number of Units

Unit-Building Ratio

Comox

1 3 1 4 4 1

84

84.0 77.3 73.0 72.5 62.0 61.0 46.4 46.4 39.0 38.0 35.7 30.4

Colwood Sicamous

232

73

Port Coquitlam

290 248

White Rock Cranbrook

61

New Westminster

16 13

743 603

Langford

Williams Lake

1 1

39 38

Saanich Burnaby

69 33

2461 1004

Port Moody

In 2018, the largest building registered in B.C. was located in Surrey with 550 units. In total, there were 10 buildings with 300-plus units registered in 2018 with 9 of them having between 300 and 400 units. By location, 3 of the buildings are located in Surrey, 2 in Vancouver, 2 in New Westminster, 1 in Coquitlam, 1 in Burnaby, and 1 in North Vancouver. In comparison, 7 buildings with 300-plus units were each registered in 2017, of which 4 had over 400 units. In 2016, there were 11 buildings with 300-plus units registered in 2016, with one building over 500 units and another between 400 and 500 units. The following table provides the street addresses of the largest registered multi-unit buildings in 2018.

Table 2: Top 10 Largest Registered Multi-unit Buildings in B.C., 2018

Address

City

Number of Units

10297 133A Street

Surrey

550 364 364 363 344 339 331 326 321 301

600-720 Quayside Drive (WEST)

New Westminster

567 Clarke Road

Coquitlam Vancouver

725 Marine Drive SE 13778 100th Avenue 13778 100th Avenue 1033 Nelson Street 1401 Hunter Street

Surrey Surrey

Vancouver

North Vancouver

4711 Hazel Street (321 units) 600-720 Quayside Drive (EAST)

Burnaby

New Westminster

The following maps illustrate where registered buildings with more than 50 units are located in the Lower Mainland, the Capital Regional District and in Kelowna.

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Figure 12: Registered Buildings with 50 Units or More in the Lower Mainland, 2018

Figure 13: Registered Buildings with 50 Units or More in Central Vancouver, 2018

Figure 14: Registered Buildings with 50 Units or More in South Vancouver and Richmond, 2018

Figure 15: Registered Buildings with 50 Units or More in Burnaby, New Westminster and Coquitlam, 2018

Figure 16: Registered Buildings with 50 Units or More in Cloverdale/Langley, 2018

Figure 17: Registered Buildings with 50 Units or More in the Capital Regional District, 2018

Figure 18: Registered Buildings with 50 Units or More in Kelowna, 2018

Licensed Residential Builders

2018 Highlights  The number of Licensed Residential Builders has grown steadily since 2009 and reached a new high of 7,916 in 2018  Nearly 70% of BC builders reported working in the Lower Mainland which includes Metro Vancouver, the Fraser Valley, the Sunshine Coast and the area from Squamish to Whistler  BC builders reported completing 4 homes per year on average  The average reported builder tenure was 15 years

OVERVIEW

The Homeowner Protection Act and regulations require that all new homes built in B.C. are built by Licensed Residential Builders and are covered by mandatory, third party home warranty insurance. BC Housing licenses home builders and is responsible for administering the Act and regulations. As part of the enhanced licensing system, builders are required to meet or exceed minimum qualification standards in order to become a new Licensed Residential Builder. In addition, current Licensed Residential Builders must participate in continuing professional development activities to keep their licence in good standing. These requirements enhance professionalism in the residential construction sector and give home buyers confidence that their home has been built by a qualified builder to a good standard.

The data in this section is from BC Housing’s Builder Licensing Registry as well as the Licensed Residential Builder Survey . Further information on licensing requirements is available on the BC Housing website.

“The increasingly competitive B.C. construction market is a hot bed of activity. The BC Residential Building Statistics & Trends Report is as an essential resource for industry experts from across the development and construction supply chain. Having this information allows them to understand market trends and forecasts before making their next strategic move to stay ahead of the pack.”

Fiona Famulak, President Vancouver Regional Construction Association

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LICENSING

Both the number of Licensed Residential Builders and the number of Licensed Building Envelope Renovators (BERs) grew slightly between 2017 and 2018. The number of LRBs has grown continuously since 2009, reaching a new high of 7,916 in 2018. LRBs increased 1.1% compared to 2017, and more than doubled compared to 2002. In 2018, the number of BERs increased from 78 to 80.

“Construction is an intensely competitive sector. Success means

knowing your market and planning your next move strategically and analytically. The BC Residential Building Statistics and Trends Report provides detailed information that savvy business owners can turn into a competitive advantage.”

Chris Atchison, President BC Construction Association

Figure 19: Number of Licensed Residential Builders and Building Envelope Renovators (2002-2018)

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

100 120 140 160 180 200

7,916

80

0 20 40 60 80

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As of January 2, 2019, Aviva through National Home Warranty had the largest market share of LRBs (34.9%) and BERs (60.0%).

Of the 80 Licensed Building Envelope Renovators, Aviva accounted for 48 (60.0%), followed by Travelers Canada at 15 (18.8%) and RSA Canada (represented by WBI Home Warranty) at 10 (12.5%). Echelon represented by Pacific Home Warranty Insurance Services accounted for 7 (8.8%).

To obtain warranty insurance for new homes and building envelope renovations, LRBs and BERs must apply and be accepted for home warranty insurance coverage by a warranty insurance provider. In some cases, a LRB or BER may be registered with more than one warranty provider. Of the 7,916 LRBs with warranty acceptance from warranty providers, Aviva through National Home Warranty accounted for 2,760 (34.9%), followed by Echelon represented by Pacific Home Warranty with 2,710 (34.2%), Travelers Canada with 1,704 (21.5%), and RSA Canada represented by WBI Home Warranty with 742 (9.4%).

Figure 20: Market Share of Licensed Residential Builders, 2018

Figure 21: Market Share of Building Envelope Renovators, 2018

18.8%

21.5%

34.9%

12.5%

9.4%

60.0%

8.8%

34.2%

Aviva Echelon (Pacific Home Warranty)

RSA Canada (WBI Home Warranty)

Travelers Canada

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LICENSED RESIDENTIAL BUILDER SURVEY

Survey Methodology The Licensed Residential Builder Survey is a province-wide quantitative survey covering the typical builder 7 profile (industry experience, type of builder), their construction activities, and their satisfaction and perceptions related to research and education projects. The survey was conducted bi-annually between 2003 and 2011 and annually between 2012 and 2018. For the 2018 survey, email invitations were sent to 5,758 builders in good standing without expired, suspended or cancelled licenses. Builders completed a total of 1,206 online surveys which represented a response rate of 20.9%. To ensure the final sample accurately reflected the total population and composition of builders in B.C., mathematical weights were applied based on region (i.e. the area of B.C. where they primarily build) and the number of homes built, or started, in the past year. In 2017, survey language was updated to reflect the new name of Licensing and Consumer Services, a branch of BC Housing. In all prior surveys, the Homeowner Protection Office (HPO) was referenced.

Further information on survey methodology is provided in Appendix 1.

7 Includes licensed developers, custom home builders, general contractors, building envelope renovators, project/construction managers, and others.

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Survey Results Construction Activity

Primary Area of Construction In 2018, 69% of builders reported working primarily in the Lower Mainland 8 , followed by 15% in the Southern Islands 9 , 10% in the Okanagan, and 3% in both the Kootenays and Central and Northern B.C.

Figure 22: Percentage of Builders by Primary Area of Construction, 2018

3% 3%

10%

69%

15%

Based in Lower Mainland

This is the same as in 2017.

69%

Lower Mainland Southern Islands Okanagan Kootenays Central/North BC

Base: (n=1,206)

Figure 23: Percentage of Builders by Primary Area of Construction (2003-2018)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

14% 14% 15% 15% 12% 11% 10% 10% 10% 9% 10% 10%

21% 18% 17% 16% 16% 15% 15% 15%

20% 23% 22% 22%

61% 58% 57% 57% 60% 63% 64% 67% 67% 70% 69% 69%

2003 (n=968)

2005 (n=1,094)

2007 (n=1,162)

2009 (n=1,125)

2011 (n=1,316)

2012 (n=1,477)

2013 (n=1,452)

2014 (n= 1,097)

2015 (n=1,288)

2016 (n=1,526)

2017 (n=1,008)

2018 (n=1206)

Lower Mainland Southern Islands

Okanagan Kootenays

Central/North BC

8 For the purposes of this survey, the Lower Mainland region includes Metro Vancouver, the Fraser Valley, the Sunshine Coast and the area from Squamish to Whistler. 9 The Southern Islands includes Vancouver Island and the Gulf Islands.

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Housing Type Constructed in Past Five Years In 2018, 97% of builders reported building single detached homes in the past five years, while 18% built rowhouses, townhouses or duplexes, 8% built low-rises, and 2% built high-rises.

Figure 24: Percentage of Builders by Housing Type Constructed in the Past Five Years (2013-2018)

100%

20%

21% 19% 19% 22% 20% 18% 20% 18%

25% 25% 25%

80%

60%

40%

96% 94% 92% 93% 95% 95% 94% 97% 97% 97% 96% 97%

20%

0%

2003 (n=968)

2005 (n=1,094)

2007 (n=1,162)

2009 (n=1,125)

2011 (n=1,347)

2012 (n=1,463)

2013 (n=1,434)

2014 (n= 1,097)

2015 (n=1,288)

2016 (n=1,526)

2017 (n=1,008)

2018 (n=1,206)

Single detached Row/townhouse/duplex

Multi‐unit high‐rise

Multi‐unit low‐rise

Note: Multi-unit low-rise refers to buildings with less than four storeys and multi-unit high-rise to buildings with four storeys or more.

Homes Built or Started Building in Past Year 10 Most surveyed builders (83%) reported that they built or started building between 1 and 5 homes in the last year. Over half (52%) of builders reported building or starting between 1 and 2 homes, followed by 31% reporting between 3 and 5 homes, and 11% reporting no home construction. The proportion of builders with more than 5 homes started or built was low, at 1% each for 11 to 20 and 21 to 50 homes, and 2% for 51 or more homes. There was very little change in the number of homes built or started between 2017 and 2018. In 2018, the average number of homes built or started in the past year remained at 7.0 per builder which is the same as in 2017, but higher than the low of 4.9 in 2016.

Figure 25: Percentage of Homes by Number of Buildings Started, 2018

31%

83%

11%

started 1 to 5 homes last year

52%

None

1 to 2

3 to 5

6 to 10

11 to 20* 21 to 50* 51+*

Base: (n=1,206)

10 All homes worked on over the past year, including homes started but unfinished and homes previously started and finished.

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Among builders who reported building high-rise homes, the average number of homes built or started per builder dropped from 189.1 in 2017 to 96.1 in 2018; however, it was still higher than the 2016 average of 78.6. Similarly, the average number of units built or started across builders who reported building multi-unit low rises dropped from 47.5 to 41.3 homes between 2017 and 2018. Among builders who reported building row, townhouses or duplexes, the average number of homes built or started per builder decreased from 22.2 to 12.7. Across single detached home builders, the average number of homes built or started per builder dropped from 4.6 to 4.4

Figure 26: Percentage of Builders by Number of Homes Built or Construction Started (2003-2018)

100%

2% 3% 3% 2% 2% 2% 2% 2%

90%

10%

8%

11% 11%

27% 26% 26% 27% 25% 27% 29% 31%

80%

70%

24%

31%

60%

32% 26%

50%

50% 56% 57% 55% 57% 54% 53% 52%

40%

43%

30%

43%

39% 40%

20%

10%

15% 16% 11% 10% 12% 13% 13% 11% 11%

7% 5% 6%

0%

2003 (n=968)

2005 (n=1,094)

2007 (n=1,162)

2009 (n=1,125)

2011 (n=1,347)

2012 (n=1,463)

2013 (n=1,434)

2014 (n= 1,097)

2015 (n=1,288)

2016 (n=1,526)

2017 (n=1,008)

2018 (n=1206)

None

1 to 2

3 to 5

6 to 10

11 to 20*

21 to 50*

51+*

* Response category grouping different prior to 2012.

Homes Completed in Past Year 11

Figure 27: Percentage of Builders by Number of Homes Completed, 2018

In 2018, over 75% of builders surveyed reported finishing between 1 and 5 homes in the past year . Over half (58%) reported finishing between 1 and 2 homes, followed by 20% reporting no homes, and 17% reporting between 3 and 5 homes. The proportion of builders reporting more than 5 homes completed in the past year was low, 2% each for 6 to 10 homes and 21 to 50 homes, and 1% each for 11 to 20 homes and 51 or more homes. There were relatively small shifts in builder distribution by number of homes completed between 2017 and 2018.

17%

75%

finished 1 to 5 homes

20%

58%

None 1 to 2 3 to 5 6 to 10 11 to 20* 21 to 50* 51+*

Base: (n=1,206)

11 Only homes that were finished in the past year. Does not include started but unfinished homes.

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The average reported number of homes completed in the past year decreased from 4.7 in 2017 to 4.0 in 2018; however, the average was still higher than in 2016 (3.5) and 2015 (3.9). These values are all considerably lower than the 2007 peak of an average of 12.9 homes completed by builder.

Figure 28: Percentage of Builders by Number of Homes Completed (2007-2018)

100%

90%

16% 18% 19% 18% 17% 17% 17% 17%

80%

18%

70%

21%

60%

57% 60% 57% 55% 56% 54% 55% 58%

50%

49%

40%

41%

30%

20%

10%

16% 17% 22% 18% 17% 21% 21% 24% 21% 20%

0%

2007 (n=1,162)

2009 (n=1,125)

2011 (n=1,347)

2012 (n=1,463)

2013 (n=1,434)

2014 (n= 1,097)

2015 (n=1,288)

2016 (n=1,526)

2017 (n=1,008)

2018 (n=1206)

None 1 to 2 3 to 5 6 to 10 11 to 20* 21 to 50* 51+*

* Response category grouping different prior to 2012.

Between 2017 and 2018, the average number of homes finished decreased for all housing types but was particularly pronounced for homes in high-rise buildings, which decreased from an average of 114.0 housing units in 2017 to 52.4 units in 2018 (which is comparable to the 2016 average number of 56.2 units). The average for multi-unit low-rises decreased from 27.4 units to 23.2 units, the average for rowhouses, townhouse or duplexes decreased from 13.6 units to 9.0 units, and the average for single detached homes decreased from 3.0 to 2.7 homes.

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Builder Profile

Industry Experience

Figure 29: Percentage of Builders by Years of Industry Experience, 2018

Nearly a third (32%) of builders reported 20 years or more industry experience. Nearly one third (31%) of builders reported 5 years or less industry experience. Approximately half (51%) had 10 years or less experience. Average reported builder tenure was 15 years in 2018, an increase from 13 in 2017. Since 2003, the proportion of builders with 0 to 5 years’ experience increased 10 percentage points and the proportion of builders with 6 to 10 years’ experience increased 7 percentage points. The proportion of builders with 20 to 29 years’ experience saw the largest decline and has decreased by 9 percentage points since 2003.

10%

15%

32% 20+ years of experience

21%

17%

5%

20%

13%

0 ‐ 2 years

3 ‐ 5 years

6 ‐ 10 years 11 ‐ 15 years

16 ‐ 19 years 20 ‐ 29 years 30+ years

Base: (n=1,206)

Figure 30: Percentage of Builders by Years of Industry Experience (2003-2018)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

14% 15% 16% 19% 18% 17% 17% 14% 13% 15% 13% 15%

13% 13% 13% 7% 9% 10% 10% 13% 15% 15% 15% 10% 9% 14% 18% 15% 13% 15% 15% 19% 19% 18% 19% 21% 13% 12% 12% 18% 22% 21% 22% 19% 19% 19% 20% 20% 17% 13% 11% 9% 10% 11% 11% 12% 12% 13% 14% 13% 7% 9% 9% 6% 5% 5% 4% 4% 4% 3% 4% 5% 26% 24% 22% 25% 23% 22% 21% 19% 18% 18% 15% 17%

2003 (n=968)

2005 (n=1,094)

2007 (n=1,162) 3 ‐ 5 years

2009 (n=1,125)

2011 (n=1,316)

2012 (n=1,477)

2013 (n=1,452)

2014 (n= 1,097)

2015 (n=1,288)

2016 (n=1,526)

2017 (n=1,008)

2018 (n=1206)

0 ‐ 2 years

6 ‐ 10 years

11 ‐ 15 years

16 ‐ 19 years

20 ‐ 29 years

30+ years

Average builder tenure was the lowest in the Lower Mainland at 13.1 years in 2018, while the highest builder tenure was in the Kootenays at 19.9 years 12 . Builders constructing single detached homes had the least amount of experience since they reported an average of 14.5 years of experience. In comparison, those constructing multi-unit homes averaged between 17 and 20 years of experience. 13

12 Caution: small base size. 13 Caution: small base size.

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Type of Licensed Residential Builder In 2018, 68% of builders referred to themselves as general contractors and 67% considered themselves to be custom home builders. Over a third of builders classified themselves as project/construction managers (35%) and developers (34%). A relatively small proportion identified as a building envelope renovator (4%) or other (2%).

Figure 31: Percentage of Builders by Type (2007-2018)

100%

25% 25% 30% 28% 30% 30% 33% 33% 34% 35%

80%

30% 35% 31% 28% 31% 35% 32% 31% 37% 34%

60%

59% 62% 65% 65% 63% 60% 65% 69%

66% 68%

40%

20%

62% 66% 69% 68% 69% 72% 74% 72% 68% 67%

0%

2007 (n=1,162)

2009 (n=1,125)

2011 (n=1,316)

2012 (n=1,477)

2013 (n=1,452)

2014 (n= 1,097)

2015 (n=1,288)

2016 (n=1,526)

2017 (n=1,008)

2018 (n=1206)

Custom Home Builders

General Contractors

Developers

Project/Construction Managers

Building Envelope Renovators

Other

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Energy Efficiency

Use of a Green Building Program With 16% of builders reporting participating in a green building program in 2018, the participation rate was the highest since 2012 when tracking participation in green building programs began.

Figure 32: Use of a Green Building Program (2012-2018)

20%

16%

16%

15%

15%

13%

13%

12%

11%

10%

5%

0%

2012 (n=1,464) 2013 (n=1,419) 2014 (n=1,097) 2015 (n=1,288) 2016 (n=1,526) 2017 (n=1,008) 2018 (n=1,206)

Other survey findings include:

 Builders by Housing Type - Those who build single detached homes are the least likely to report building homes that are part of a green building program (15%).  Builders involved in the construction of multi-unit high-rises were the most likely to report building homes as part of a green building program (43%).  In the middle, 28% of builders constructing low-rises, rowhouses, townhouse, and duplexes participated in a green building program.

 Builders by Region - Lower Mainland and Central/Northern B.C. 14 builders (17%) were the most likely to report participation in a green building program, followed by builders on the Southern Islands (15%) and builders in the Kootenays 15 (14%).  Okanagan builders were the least likely to report participation in a green building program (7%).  In most regions, there was little change since 2017. However, in Central Northern B.C. over three times more builders reported building green homes in 2018 relative to 2017 (5% in 2017, 17% in 2018).

14 Caution: small base size. 15 Caution: small base size.

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