March 4, 2005

Banner year reported by residential industry

By Grant Cameron

staff writer

Last year was an outstanding one for residential construction, with the total value of investment reaching $70.4 billion, Statistics Canada reports.

The figure for 2004 was 14.2 per cent higher than the previous record of $61.6 billion in 2003.

It was the sixth consecutive year that investment in residential construction has increased.

StatsCan says all three components of investment in residential construction — new housing, renovations and acquisition costs — recorded strong gains over 2003.

“The excellent performance in the housing sector in 2004 was due to low mortgage rates and their positive impact on affordability,” StatsCan says. “The strong employment situation, high consumer confidence and low apartment vacancy rates in a number of large centres, such as Montreal and Vancouver, also contributed to the growth in demand for new housing.

“Growth in the average value of new housing starts also fuelled the rise in the total value of investment in residential construction.”

StatsCan says investment in new housing construction reached $36 billion in 2004, up 14.6 per cent from 2003.

The growth was spurred by a strong demand for the construction of new single-family homes and by a sharp increase in investment in new apartment/condominium units.

Expenditures on renovations, the second major component, rose 13.6 per cent to $28 billion in 2004.

The high level of existing home resales in recent years was a key factor in the strong growth in renovations.

Meanwhile, acquisition costs increased by 14.7 per cent to $6.3 billion in 2004.

At the provincial level, all provinces and territories recorded increased investment in residential construction in 2004.

StatsCan says strong demand for new housing construction put Quebec in the lead in terms of the rise in dollars for all residential construction in 2004, with expenditures of $17.5 billion.

Ontario and British Columbia followed in terms of increased investments.

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