Building permit values skyrocket as large developments drive growth

Building permit values in Abbotsford rose in October, driven by increases in all three categories of non-residential permits.

While residential construction is down slightly in Abbotsford

While residential construction is down slightly in Abbotsford

by Tyler Orton – Contributor

Building permit values in Abbotsford rose in October, driven by increases in all three categories of non-residential permits, according to the Vancouver Regional Construction Association (VRCA).

Seasonally adjusted total building permit values in the region surged 112 per cent in October to $26.9 million, up from $12.7 million in September.

Non-residential permit values rebounded 271 per cent to $22.3 million from $6 million in September. The value of residential permits fell 32 per cent to $4.5 million from September’s $6.7 million.

“Non-residential activity in Abbotsford hit its second highest level this year,” said Keith Sashaw, president of the VRCA.

Year-to-date total permit values were 97 per cent higher to $253 million in the first 10 months of the year, compared to $128.3 million in the same period last year. Non-residential permits were 303 per cent higher to $170.5 million, while residential permits were down three per cent to $76.5 million.

“While we expect 2011 permits to come in substantially higher than in 2010, we expect fewer permits to be issued in 2012,” said Sashaw, “mainly because we don’t see a large commercial project like this year’s Mount Lehman interchange on the horizon in Abbotsford.”

Ken Baerg, director of economic development for the City of Abbotsford, said strong commercial and institutional growth are the main driving forces behind the significant increase in building permit values.

“Evidence of that would be certainly the Shape Properties development on Mt. Lehman,” Baerg said, referring to the 600,000-square-foot shopping centre currently under construction. “That one project represents close to $100 million in that (2011 building permit) value.”

Baerg said the Shape Properties development is also drawing other companies to the Mt. Lehman corridor.

Sandman Hotels purchased a significant piece of land just south of the Shape development in 2010.

Baerg confirmed that Spire Properties has since purchased a piece of land across from the Shape development. Spire plans to build a 1,000-unit storage centre.

“Mt. Lehman corridor is going to change dramatically in the years to come,” Baerg said. “As you get those anchor commercial tenants, it’s going to invariably grow. There are other businesses that are attracted to that node just by virtue of proximity to all that activity.”

Baerg said despite Sashaw’s forecast that fewer permits will be issued in 2012, the city is slated to have one of the most robust economies among Canadian municipalities based on gross domestic product.

“Whether we’ll continue to experience growth on the building permits side of things, it’s really tough to tell,” Baerg said. “We have 10 to 12 per cent of our labour force tied to the construction centre, so if there’s a slowdown or large commercial projects are completed, then those folks will be looking for employment elsewhere.”

As for residential construction in 2012, Baerg said it would be highly speculative to guess where investment dollars will be going.

He said that although the construction of single-family units has slowed since 2008, he expects the construction of multi-family units to continue to increase modestly in the coming year.

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