Residential construction is making a comeback in Nanaimo, after permits hit a 12-year low in 2013.
Building permits and new construction bounced back in 2014, with residential projects leading the way, housing statistics show.
The City of Nanaimo saw a 75-per cent uptick in residential construction in the last year, with $83.2 million in planned investment compared to $50.5 million in 2013.
Permits for multi-family construction also experienced a dramatic upswing, with applications to create 336 units up from 77 the year previous.
The Canada Mortgage and Housing Corporation shows that actual residential housing starts were on the rise in 2014, with builds three times what they were last year in the month of December alone.
In total, there were 665 new residential projects, compared to 415 in 2013, with multi-family construction rising 65 per cent and single-detached homes by 55 per cent.
Housing experts say lower vacancy rates and the supply of housing are behind the increase.
The City of Nanaimo also saw a jump in permit applications in the first two weeks of December, including 102 for single-family homes, as people tried to beat out new building code regulations that came into effect Dec. 18, said Tom Weinreich, the city’s manager of building inspections. The code changed efficiency requirements for things like hot water tanks, sky lights and windows.
Overall 2014 was a “really good year for construction in Nanaimo,” said Weinreich.
And momentum isn’t expected to go away, with the CMHC and B.C. Real Estate Association both projecting higher building activity during the next 12 months.
Cameron Muir, chief economist with the B.C. Real Estate Association, said there was significant construction activity in the lead up to 2013, which created a spike in complete but unoccupied units, and drove builders to cut back on production. Last year they got back into the market, starting a ‘catch up’ of home building activity that’s expected to continue.
“We’re likely to see an eight- to 10-per cent increase [in 2015],” Muir said. “We’ve seen an increase in both consumer demand in the overall market in Nanaimo and Vancouver Island and that’s also resulting from an increase in terms of population growth as well.
“Both those things taken in tandem, we see a continued, fairly robust activity on the housing start side for Nanaimo.”
The B.C Real Estate Association also anticipates growth in multi-family housing starts, which it believes will increase 15 per cent in 2015.
Affordability is a “major constraint” in B.C. housing markets and multi-family is more affordable for first-time buyers as well as retirees who are looking for a more care-free housing type, Muir said.
The CMHC believes multi-family will see higher activity at 19 per cent, contributing to a total 650 overall housing starts in the next year.