Canadian building permits rose by 6.8% in November to an all-time-high of 11.2 billion CAD, the third straight monthly increase amid strong demand for residential housing, according to data released by Statistics Canada on Wednesday.
All of the gains came from the residential sector, which increased by an impressive 12% while nonresidential permits fell by 3.4%. The housing price index also rose by 0.8% in November.
The value of building permits acts as an indicator of future housing starts and of developers’ anticipation of demand. Given record-breaking home sales and the continuing housing shortage, developers have plenty of reasons to be optimistic.
Seven provinces reported increases, notably Alberta as the oil boom begins to turn the market around, and Nova Scotia as families continue to flock to the province from Toronto and Vancouver in search of value.
Challenges reside not in demand but rather in the shortages of building materials and of labor, the latter of which shows no signs of easing.
The Canadian housing market is one of the few economic indicators that has risen sharply in the pandemic. While fluctuations are possible over the coming months, the omicron variant will do little to dampen the housing market. The overall upward trend in building permits will most likely continue.
