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Vancouver building permits hit record levels

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by JOC News Service

This year, the City of Vancouver saw its highest building permit levels since before the 2008 recession.
Vancouver building permits hit record levels

The city issued a record $1.12 billion in building permits during the first six months of 2014, the highest amount since pre-recession levels.

This is the third year in a row that construction has topped the billion-dollar figure for the first half of the year.

Building permit values have increased 6.7 per cent in the first six months of 2014 over the same period last year, continuing a trend in high value construction.

"It's exciting to see Vancouver's economy growing at a strong pace," said Mayor Gregor Robertson in a statement to media.

"Low taxes, a highly-skilled work force and reduced red tape at City Hall are helping us achieve the highest levels in building permit values since before the recession, including the construction of significant new rental housing. Vancouver's economic action strategy is working to create thousands of new jobs, make our city more competitive for investment, and build a forward-looking foundation for sustainable growth," he said.

According to the city, key developments that contributed to the 2014 increase include One Pacific by Concord Pacific in downtown Vancouver, a two tower building with 435 units, valued at $87 million, and a new 195 unit rental building by Bosa Blue Sky Properties on Main St. at East Georgia St. with a construction value of $27 million.

The second quarter news specifically in the non-residential market was not quite as rosy.

According to the Vancouver Regional Construction Association (VRCA), Non-residential construction investment spending in Metro Vancouver was down 4.4 per cent.

"The trend we have observed for the past four quarters has continued this quarter," said Fiona Famulak, president of the VRCA in a press release.

"Moderate declines in the smaller sectors of industrial and public spending are mitigated by much smaller declines in the largest sector – commercial spending."

Famulak said that commercial building spending continues to hold up well as it has since 2013 and early phase projects like the 31-storey Exchange office tower and the Tsawwassen Mills should affect future spending.

The VRCA's 2014 outlook is mixed with a likely gain in commercial construction spending offset by less spending on industrial and public buildings.

The moderate growth phase will continue through 2014 and pick up in 2015 and beyond, which bodes well for future private sector investment spending.

Year-over-year building construction cost inflation dipped 0.3 per cent in the second quarter of 2014, the first such decline since 2010.

Total non-residential construction prices are little changed in the past five quarters, notwithstanding large increases in gasoline, diesel fuel and lumber during the same period.

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