The value of building permits in Canada decreased by 2.1% in August from July to a seasonally adjusted 9.66 billion Canadian dollars as developers continued to feel the effect of supply and labour shortages.
August’s decline, which fell short of forecasts, continued the downward trend from the peak in March and came even as buyers, seeking more room to work and educate their children, continued to fuel rising demand.
Ontario and British Columbia led the way in the declines, undermining increases in most other provinces, according to data released by Statistics Canada on Monday.
Even with the recent declines, though, building permits are still higher than they were before the pandemic and demand has proven resilient, a trend that will persist as Canada opens up thanks to immigration. But developers have become hesitant to apply for new permits as they struggle to secure enough raw materials and attract workers.
Housing supply has been a chronic issue for Canada, and a decrease in building permits is not going to solve it. The construction boom that began in the pandemic is badly needed to address this shortage.
The value of building permits might continue to cool in the winter but will pick up next year when the bottlenecks in the supply chains ease and the prices of raw materials are no longer a concern.
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