A flood of new housing projects have started construction in the last month in B.C., and a Langley builder said there are a number of factors at play.
According to data from the Canada Mortgage and Housing Corporation (CMHC), Greater Vancouver, which includes Langley, saw builders start 7,322 housing units from January through March this year.
That number is 67 per cent higher than the 4,380 housing starts by this time last year.
Of those housing starts, 678 were single family houses, and 6644 were other types of housing, including condo units, townhouses, and duplexes.
Lanson Foster, founder of Langley housing developer Lanstone Homes, said many of these projects have been in the planning stages for years.
Now, for a number of reasons, they’re all starting construction at once.
Part of the reason is the COVID-19 pandemic, which has been driving demand for larger homes, including single family and townhouses. Langley has seen skyrocketing real estate prices in the last few months, with prices rising here much faster than in more urbanized core areas like Vancouver or Burnaby.
In Langley, there are also local reasons for a big surge in housing construction.
Foster noted that on March 23, development cost charges in Langley Township went up substantially, the first big increase in those costs in several years.
“Everybody was obviously pushing really hard to beat that deadline,” Foster said.
A flood of applications were approved by the Township council earlier this year as developers tried to get in under the wire, paying the old, lower rates rather than the new higher ones.
Developers are facing a number of unusual conditions right now.
They’re borrowing money to finance projects at lower rates, thanks to the same rock-bottom Bank of Canada prime rate that has lowered the cost of a mortgage for home buyers.
But they’re also dealing with huge increases in the price of lumber, and Foster said that’s now extending into other building materials, including siding, plumbing, and metals.
“It’s really pushing costs up,” he said.
Housing prices have spiked, and builders are watching for signs the sales environment is a bubble, about to burst.
“It’s something we’re definitely always keeping our eye on,” said Foster.
In Langley, the benchmark price of a single-family home in March was up more than 24 per cent from a year before. The average price was increasing even faster – it was up 35.3 per cent year over year.
Foster said from what he’s heard, the level of “craziness” in the markets has started to ebb, even as sales remain high.
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