Non-residential permits seal year-end growth

THINK OUTSIDE THE BOX:  The future of Alberta’s real estate industry isn’t looking as grim as that of other sectors, according to today’s new building permit numbers from Statistics Canada.

Last December, developers secured more than $1.2 billion in permits for construction on both residential and non-residential projects, up 26 per cent over the previous month. While this sounds impressive, the total value of permits is actually 32 per cent lower than one year earlier.

Alberta’s non-residential permits were the main reason for the monthly growth last December. The value of institutional and governmental building permits ($204 million) more than doubled as did industrial permits ($93 million). Commercial permits ($220 million) actually declined by about 15 per cent.

Residential developers in Alberta also did their part to pump the numbers. Permits for residential projects jumped from $565 million to $673 million (20 per cent) between November and December. While that growth is a good sign, the value of projects at the end of 2015 was still well below what was seen at the end of 2014.

The trend for 2016 is still unclear. For some developers, it may prove to be a good year to invest as building and construction costs are likely to be lower than in previous years.

Nick Ford      Economist      February 8, 2016

 

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