CPABC: Thompson-Okanagan housing starts and major project activity strong in 2022, but new building permits down significantly

KELOWNA, British Columbia, April 03, 2023 (GLOBE NEWSWIRE) -- According to BC Check-Up: Invest, an annual report by the Chartered Professional Accountants of British Columbia (CPABC) on investment trends across the province, there were 4,868 housing units that began construction in the Thompson-Okanagan in 2022.

"This increase in housing supply is important to house the many new residents the Thompson-Okanagan continues to attract," said Karen Christiansen, FCPA, FCA, partner at MNP LLP in Kelowna. "More supply is also needed to help improve affordability for residents in the region. While housing prices have declined over the past year, they remain well above pre-pandemic levels."

The 4,868 housing starts in 2022 was down by 0.6 per cent compared to 2021, but above the average of 4,319 from 2016 to 2020. There were 1,399 detached units that began construction in 2022, which was a decrease of 24.6 per cent compared to 2021. In comparison, there were 3,469 attached units started, such as condos or townhomes, an increase of 14.0 per cent compared to 2021.

"As the many condo developments across the region are a testament to, investors have recently favoured larger developments with many units," noted Christiansen. "In addition, the region has continued to see strong major project activity, primarily in residential, infrastructure, and recreation projects."

The inventory of major projects was $17.5 billion in Q3 2022, a decline of 7.4 per cent compared to Q3 2021. The decrease was due to the official completion of several major projects, including the Ponderosa Residential Development ($1.0 billion) and the Penticton Regional Hospital Patient Care Tower ($312 million).

In Q3 2022, there were $11.0 billion worth of projects under construction across the region, which was 62.5 per cent of the total estimated major project value for the Thompson-Okanagan. The two largest projects that started construction between Q4 2021 and Q3 2022 were the Highway 1 Four-Laning ? Ford Road to Tappen ($243 million) and the UBC Okanagan Interdisciplinary Collaboration and Innovation Building ($109 million).

"This high level of major project construction activity supports the region's economy and employs many residents, creates housing and infrastructure, and provides new services to residents," noted Christiansen. "This is particularly important now, as high interest rates have slowed new building investment."

Overall, the total value of building permits issued in the Kelowna CMA in January 2023 was 51.1 per cent lower than in March 2022 when interest rates began to rise. This was primarily due to a significant decline in the value of residential building permits, down by 74.5 per cent over that period.

"With high interest rates expected to stay and the significant fall in building permits, building construction activity may slow this year," concluded Christiansen. "Given this challenging investment climate, it is more important than ever to focus on policies that attract more capital investment to our region."

To learn more, see www.bccheckup.com.

About CPA British Columbia
The Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for over 39,000 CPA members and 6,000 CPA students. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy. CPAs are recognized internationally for bringing superior financial expertise, strategic thinking, business insight, and leadership to organizations.