Greater Victoria Achieves Record-Breaking Homebuilding Activity in 2023
Despite facing challenges such as rising interest rates and increased costs, the capital region of Greater Victoria set a remarkable new record for housing starts last year. According to figures released by the Canada Mortgage and Housing Corporation (CMHC), a total of 4,992 new homes were initiated in 2023, surpassing the previous record of 4,809 set in 2021. This achievement exceeded the longstanding record of 4,439, which was established in 1976.
Casey Edge, Executive Director of the Victoria Residential Builders Association, acknowledged the difficulties in the current landscape, including soaring costs, delays in approval processes, and rising development charges. Builders, he noted, are compelled to focus on large multi-family projects to address the challenge of the economy of scale.
Of the 4,992 housing starts in the region last year, the majority—4,238—comprised condominium units or rental apartments, with only 385 being single-family homes. Edge expressed disappointment in the 23% decline in the number of “missing middle” housing projects, such as townhouses, which are considered more suitable for young families.
Despite the record-breaking numbers, Edge emphasized that the pace of construction is struggling to keep up with demand. Currently, there are 8,393 homes under construction in the region, predominantly condominiums or rental apartments.
Langford led the region with 1,406 new homes started, followed by Victoria with 964, Esquimalt with 766, and Saanich with 555. In contrast, Oak Bay, North Saanich, Metchosin, and Highlands started fewer new homes.
Regarding the potential impact of new provincial housing legislation allowing the replacement of single-family homes with denser housing forms, Edge expressed uncertainty. The legislation establishes upfront amenity contributions expected from developers for each housing project, covering areas like affordable housing, parks, childcare, and community facilities. Changes to development cost charges were also introduced, allowing local governments to allocate charges for additional services, leading Edge to emphasize the importance of monitoring how these changes will influence future construction costs and housing development.