B.C.’s building permits are surging ahead while other provinces showed significant decreases, according to Statistics Canada. Data from last November shows nation-wide permits down $6.2 billion (19.6 per cent) from October.
Surrey is the fastest growing city in Canada, and so takes its fair share of the building business. Volume doesn’t come without problems, however, and long-time developer Stephan Luking has noticed a slow down in permit approval times. His company’s latest application took six weeks longer than usual, putting pressure on tenuous agreements with their trades workers.
“It gets very frustrating to be a month and a half behind,” says Luking of Gramcery Developments. “Trades are always available, but some might not be good and that causes you more problems. We have trades we’ve been working with over time so we try to keep our guys busy, but really they’re a sub-contract.”
“Developers can sell as much as they can build,” says Neil Moody, CEO of the Canadian Home Builders Association of B.C. “But additional costs from cities are challenging.”
Municipalities might approve a development and then require a new park or a streetlight. This costs goes to developers. Cities have been offloading infrastructure development to builders for a long time, but increasingly they are using it as a way to finance infrastructure.
And margins in the development industry are low. “They rely on efficiencies within the system to make their business work.” Says Moody. Volume delays and increased costs from cities challenge that model.
Nonetheless a busy market is great for B.C.’s economy, and the high number of building permits signals jobs and money in the market to home buyers and investors.