Moncton, Dieppe break building permit records as construction booms

The skyline tells the tale: new buildings are popping up across the Moncton region thanks to a construction boom that's seen record-setting building permit values amid an increasingly competitive residential housing market.

"We have some pretty impressive stats," Moncton Mayor Dawn Arnold said at a city council meeting Monday.

"We're shattering building permit records We've got cranes every direction we look, and we are, as has been said, the economic engine of the province."

Across the metro area, new hotels and apartment buildings are rising as large new commercial and industrial buildings are built or expanded.

John Wishart, CEO of the Greater Moncton Chamber of Commerce, called it "a nice collision of metrics" leading to economic growth.

Building permits worth$378 million were issued in Moncton, Dieppe and Riverview last year, the municipalities reported.

The building boom comes as residential vacancy rates continue a multi-year decline and rent costs rise. That can make it harder to find an apartment, particularly one that's affordable.

The region's residential vacancy rate fell from 2.9 per cent in October 2018 to 2.2 per cent in October 2019, according to the Canada Mortgage and Housing Corporation.

The low vacancy rate has prompted developers to build homes and apartment buildings.

"You just have to look around Dieppe, Riverview and Moncton to see the amount of building complexes going up, and the majority of them are apartment or condo buildings," Nadine Fullarton with the Moncton Northeast Construction Association said in an interview.

The organization represents general contractors, trade and sub contractors and suppliers to the construction industry. Fullarton said members of the association have reported a 30 to 40 per cent increase in developers offering contracts for apartment and condo buildings.

In 2019, Moncton issued building permits for 16 new apartment buildings with 727 units, 68 new single-unit homes, and 114 duplex units.

Combined, residential permits accounted for 37.7 per cent of$257.4 million in building permits issued last year, a new city record.

Last year was also record-setting for Dieppe, where permits worth $96 million topped a $90 million record set in 2016. Dieppe's figures include permits for 314 new housing units, though the largest single permit was for the city's new arena complex.

In Riverview, the town issued permits worth a total of $25 million, shy of the 2015 record of $29 million.

All of the construction activity means steady employment for people in the construction industry, Fullarton said. It's meant a shortage of workers in some trades that prompted the organization to plan a national and international recruitment campaign.

The region's immigration strategy calls for 2,700 to 3,500 immigrants per year by 2024 to sustain economic growth and fill jobs.

Wishart said there are downsides, including the increase in the average rent for a one-bedroom apartment from $698 in 2018 to $732 in October 2019.

"If you're bringing jobs to the community and you need to find housing for them, that is becoming difficult, especially for families," Wishart said. "Maybe it's a good problem to have, but I'm not sure we can build (housing) fast enough and or at the right types."

In recent years, monthly home sales reports from the Greater Moncton Realtors du Grand Moncton have described the region's housing market breaking records.

Parise Cormier, president of the association, called it a sellers market. The inventory of homes on the market has hit a 15-year low, which she said has resulted in some homes getting multiple purchase offers.

"Prices are slowly creeping up, but we don't have markets like you see in bigger cities," Cormier said.

The average price for a single-family detached home in Greater Moncton stood at $197,600 in December 2019, up 4.6 per cent from a year before and 18.9 from five years earlier.

Cormier said while the association representing realtors doesn't have firm data, anecdotally they're seeing a lot of people moving from more expensive markets in Canada.

A home selling for about $200,000 here would sell for about $1 million or more in Oakville, Ont., she said.

"A lot of people are coming back home, a lot of people are retiring here, a lot of people coming here to start a family," Cormier said. "We have a better quality of life, we see a lot of immigration and our employment is pretty steady."

But rising prices and increasing rents also make the city less affordable for those with a low income. Moncton has struggled to deal with people who are homeless.

Lisa Ryan with the Greater Moncton Homelessness Steering Committee told CBC in December that there needs to be a stronger push to build more affordable housing.

"When we see developments coming into our community, or no policies attached to that, we need to get brave at saying this is wrong," Ryan said.

On Monday, Moncton council ratified a new policy to be implemented later this year that could allow developments with affordable housing to move through the city's approval process faster.

The decline in vacancy rates isn't limited to residential housing.

Ian Franklin, a vice-president with real estate firm Cushman & Wakefield Atlantic, saidthe office space vacancy rate downtown is"quite low," around four per cent.

"There's obviously a need for more office (space) downtown," he said. But he said he's not aware of any firm plans for new office buildings over the next two years.