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Hot Kamloops residential construction market in 2016 couldn't make up for slow year for commercial building

January 11, 2017 - 3:08 PM

KAMLOOPS - Despite the hot housing market this year, building permit values at Kamloops city hall were down thanks to the biggest slowdown in the commercial and industrial construction sector in a decade.

Permits for the commercial, industrial and institutional category were valued at less than half of 2015. At just over $25.5 million, it was the worst year in more than a decade for that category. The next lowest year was 2007 when $48 million worth of permits were issued.

All three sub-categories in the commercial sector were well down from the average value, with the industrial category the lowest it’s been in 10 years, and commercial and institutional the second worst in each category.

Commercial permit values were well down in all three subcategories, resulting in the worst year by far for the sector in a decade.
Commercial permit values were well down in all three subcategories, resulting in the worst year by far for the sector in a decade.

That slowdown in the commercial sector was particularly bad in the first five months of the year. Permit values in that category for January to May were only valued at under $4 million in 2016, compared to $29.8 million in 2015. That sector picked up later in the year and the final seven months were only $1 million apart.

That caused the overall permit value to fall behind. By the end of May, 2016 was $33.5 million behind 2015. However, there was a recovery as the following seven months actually outperformed the previous year by more than $11.8 million. That’s partially due to a hotter housing market.

The slow start dropped 2016 to second lowest total permit value for the year in the last 10 years. At a permit value of $157.7 million 2016 is only ahead of 2013, which totalled $149.2 million thanks to an average commercial sector and weaker housing sector.

Overall it was the second slowest year in a decade for building permit values.
Overall it was the second slowest year in a decade for building permit values.

However, the housing market was hot, and it appears density is increasing; the number of units built in the form of apartments, secondary suites and duplexes all saw increases over previous years. That’s good news for people looking to rent in the city, which currently has a 1.1 per cent vacancy rate.

Permits were approved for 295 new apartment units in five new projects in 2016, more than double the year before and more new units than any year in the past decade. Meanwhile quadruple the number of duplexes received permits.

In contrast, fewer detached homes received permits, with 186 approved in 2015 compared to 142 in 2016. The average value of those new homes was higher in 2016, though. The average value on the permit, at around $348,000 for a newly built house, is significantly lower than the average of $406,000 in the recent B.C. Assessment numbers on the city’s residential properties.

In total the city increased the number of housing units by 589 in 2016 compared to the 463 the year before. The last time the city saw that much growth in new residences was 2010 when 660 total units were added, though a great deal more were detached homes in 2010 and not smaller, multi-family homes like 2016. Last year was the biggest year in at least a decade for new units when not including detached houses.

It was the biggest year in the last decade for new residential units when detached homes weren't  taken into account.
It was the biggest year in the last decade for new residential units when detached homes weren't taken into account.

To contact a reporter for this story, email Brendan Kergin or call 250-819-6089 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

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News from © InfoTel News Ltd, 2017
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