B.C. Construction Trends & Market Insights: What to Watch in January 2025
Kyle Mark *PREC
· 3 min read
Written in January 2025. Some details have changed since, so check current numbers before you act on this.
B.C. Construction Trends & Macro Insights: January 2025 🏗️
B.C.'s construction pipeline slowed sharply heading into 2025, with building permits and housing starts falling even as rental completions surged, and that could mean tighter supply down the road. From declining building permits to surging completions and macroeconomic uncertainties, this blog breaks down the latest trends impacting the B.C. market, and buyers, sellers and investors need to watch them closely.
🚨 Construction Slowdown: What’s Happening in B.C.?
The November 2024 building permit data reveals a significant construction slowdown across B.C., raising concerns about future housing supply.
Residential Decline
Residential building permits took a major hit, plummeting 30% from $1.25 billion in October to $868 million in November 2024, on Statistics Canada's numbers as reported by Burnaby Now.
- Multi-Unit Developments Struggle: Multi-unit permit values dropped 37%, largely due to higher construction costs and weaker pre-sale activity.
- Implications: Waning buyer interest and mounting unsold inventory may lead to fewer housing starts in 2025 and beyond.
Non-Residential Growth
While residential permits declined, non-residential permits rose to $686 million in November.
- Key Drivers: Industrial, commercial, and governmental projects are picking up the slack, signaling steady demand in non-residential sectors.
📊 Takeaway: Residential construction faces mounting challenges, while non-residential activity is providing some stability in B.C.’s overall construction landscape.
🏠 Housing Supply Trends: Starts Fall, Completions Surge
Two opposing trends are shaping the housing market: falling housing starts and record completions.
Housing Starts Decline
December 2024 saw housing starts drop 13% month-over-month, CMHC reported, to an annualized pace of 231,468 units.
- Why It Matters: Fewer housing starts today mean a constrained supply pipeline in the years ahead, especially as pre-sale activity continues to weaken.
Record-Breaking Completions
On the flip side, purpose-built rental completions surged in 2024, the highest in years.
- Cooling Rent Growth: This uptick in completions has helped stabilize rent increases across Canada.
- But Watch Inventory: Unsold inventory has been climbing, with more units added recently.
📉 Market Dynamics: While more rental units are coming online, declining starts and rising unsold inventory signal long-term supply and pricing challenges. The Kyle Mark Report shows the current numbers for your area, free with an account.
🔍 Macro Trends: Interest Rates & Employment Signals
The macroeconomic environment is sending mixed signals for the real estate market:
Falling Bond Yields
The 5-year Canadian bond yield recently dipped to its lowest since November. This drop could pave the way for lower fixed mortgage rates.
Labor Market Concerns
While the job market remains strong in many sectors, private sector employment growth is slowing, signaling potential headwinds for the broader economy.
BoC Rate Cuts Expected
As of January 2025, the Bank of Canada was poised to cut its policy rate by 0.25% this week, with additional cuts expected by March 2025, which could stimulate buyer confidence.
💡 Real Estate Impacts: Lower interest rates may boost purchasing power, but affordability remains a key challenge for many buyers in Vancouver. You can test your own payment on my mortgage calculator.
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📩 Let’s Connect & Strategize for 2025
The 2025 real estate market brings unique opportunities and challenges. Whether you’re buying, selling, or investing, now is the time to create a plan tailored to your goals.
🔹 Book a consultation today: Schedule Here
🔹 Check your BC Assessment values: Visit Here
Here’s to navigating the market with confidence this year!
– Kyle Mark
Your Vancouver Real Estate Specialist
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