Total building permit values are a measure of construction and changes in building permits are often one of the first indications of changes in the surrounding economic conditions. After a period of sustained expansion, declines in building permits may indicate the expansion is ending while growth in building permits after a contraction may indicate the economy is improving.
The value of building permits in Nanaimo grew at a faster pace than in BC over the last decade. After steep declines between 2008 and 2009, building permit values have since picked up in Nanaimo and BC. Although overall trends are similar, Nanaimo’s growth rates fluctuate considerably more than the province.
Housing starts, like building permits, are a leading indicator of economic activity. Increases in housing starts are indicative of a strong or improving economy. While decreases may indicate economic activity is slowing.
In 2015 housing starts in Nanaimo increased by 27.8% over 2014 levels while BC increased by 4.1%. Over the past five years Nanaimo’s housing starts have increased by 18% and BC’s by 16.8%.
In 2015, 850 housing units were built, 384 were single family dwellings and 466 were multi-family dwellings. CMHC’s latest housing forecast for Nanaimo predicts, in 2016 single family housing construction will decrease by 8.9 percent to 350 units and multiple dwellings will decrease by 14.2 percent to 400 units. Overall new housing construction in 2016 will decrease by 11.8 percent over 2015 levels. The forecast for 2017 is 725 units, which will be a decrease of 3.3 percent over 2016 levels. Significantly higher home prices in the Vancouver and Victoria markets could support movement of people to lower-priced housing markets, generating additional demand for new housing in the Nanaimo region.