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As the economy steadily creeps along amidst the crippling effects of surging inflation rates and slower growth periods, the Central Interior chapter of the Canadian Home Builders’ Association (CHBACI) is expecting to see a decrease in building permits issued in Kamloops for this year.
CHBACI president Tom Calne said he anticipates price increases and housing shortages may continue to worsen if the market continues to slow from a construction standpoint.
“I think, for 2023, we are not going to see the same numbers at all,” Calne said. “I think myself and my peers are looking to contract from a construction standpoint as the market has slowed down due to interest rates.”
Calne also noted the problem prospective homeowners face with being approved for financing due to the so-called stress test employed by banks, wherein income is tested against higher interest rates, should they continue to rise.
A year ago, the Bank of Canada’s policy rate was 0.25 per cent. Today, it is 4.25 per cent, with eight rate hikes implemented since March 2022.
“If builders aren’t building as much, we’ll set us up for more housing shortages and then there tends to be price increases,” Calne said. “It’s a bit of a catch-22 here.”
While statistics for 2021-2022 saw an uptick in building permits being issued for apartments and condos in Kamloops, which is promising for renters and first-time homeowners, Calne believes those kinds of developments do not support diverse housing needs.
He said the City of Kamloops needs to prioritize diverse housing options in the community.
“I think it’s worth highlighting the fact that housing diversity is critical,” Calne said. “These numbers look excellent if you’re in the market for an apartment, but we need to look at other aspects of housing, as well.”
City of Kamloops building and engineering development manager Jason Dixon said he is hopeful building permit applications could increase later in this year.
“Statistically, our commercial institutional and industrial sectors were up a lot in 2022 versus 2021,” he said. “We saw that record construction value … that’s a good news story for Kamloops.”
Last year, the city set a record for construction permit value, at $415.4 million. The previous record of $395.1 million was set in 2020.
In 2022, construction on 816 residential units began in Kamloops.
To review annual reports from the city, visit https://www.kamloops.ca/business-development/building-permits/building-permit-report.
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