CPABC: Kootenay housing starts stay strong in 2021, while two major projects finished construction
Strong demand and rising prices for larger homes caused investors to focus more on developing the typically larger detached units.
CRANBROOK, British Columbia, March 15, 2022 (GLOBE NEWSWIRE) -- According to BC Check-Up: Invest, an annual report by the Chartered Professional Accountants of British Columbia (CPABC) on investment trends across the province, there were 293 housing starts in the Kootenays’ two largest municipalities in 2021, a decline of 26.2 per cent compared to the number started in 2020.
“While this was a decline, it was still the second highest number of housing starts on record, from the peak set in 2020,” said Mike Calder, CPA, CA, partner at BDO Canada. “Strong demand and rising prices for larger homes caused investors to focus more on developing the typically larger detached units.”
Over the course of 2021, 293 housing units began construction in Cranbrook and Nelson, a decline from the 397 started in 2020, but well above the 240 in 2019, and 136 in 2018. The decline was concentrated in Cranbrook, where the 195 units started in 2021 was well below the 330 started in 2020. In contrast, the number started in Nelson increased to 98 in 2021 from 67.
The decrease in housing starts was driven by fewer attached units (such as condos, apartments, and townhomes) started, with 128 started in 2021, a 56.5 per cent decline from 2020. Meanwhile, the number of detached units started increased to 165 in 2021, a gain of 60.2 per cent.
“Given the challenge many residents are having finding affordable housing in the Kootenays, the robust housing investment the region saw in 2020 and 2021 is an important step to improve supply,” continued Calder. “The region has also continued to benefit from major project activity, including the completion of two long-running projects.”
The forecasted capital cost of all major projects in the Kootenays, those with a cost of over $15,000,000, was $6.8 billion in Q3 2021, down from $7.6 billion in Q3 2020. The decline was primarily due to the completion of the Elk Water Treatment Facilities ($400 million) and the Panorama Mountain Village expansion ($250 million) in 2021.
In total, there were 18 projects under construction, worth an estimated $2.5 billion in Q3 2021, including the Inland Gas Upgrades project ($360 million) and Lake Ferry Service Upgrade ($85 million) that started in late 2020. There were nine project proposals in Q3 2021 worth $2.6 billion, the largest being the Baldy Ridge Extension Project ($1.6 billion).
“The major project activity in the region, including some new major projects that have recently begun construction, has helped provide economic stability during a challenging period. However, we have not seen any significant new proposals recently,” concluded Calder. “Given the importance major projects play in boosting economic growth and improving services for residents, it will be important for our region to foster an environment that can attract more capital investment.”
To learn more, see www.bccheckup.com.
About CPA British Columbia
The Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for over 38,000 CPA members and 6,000 CPA students. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy. CPAs are recognized internationally for bringing superior financial expertise, strategic thinking, business insight, and leadership to organizations.
For more information: Aaron Aerts, Economist 604.442.9161 [email protected]
