Canadian policymakers are helicoptering money to help stimulate building. However, despite turning to modern methods of construction—like mass timber—to help double the pace of house construction, it’s still not working. That is according to new data provided by Statistics Canada showing that the total value of building permits fell sharply in April—its lowest volume in almost a year.
And whilst all segments showed declines, the most significant pullback was in the residential sector, down 14.6%, the lion’s share connected to multi-family units (down 20.5% year on year)—thanks mainly to a $1 billion drop in the Vancouver city area. “Building intentions for single-family homes (-1.5% y/y), however, were much more resilient,” Statistics Canada said. Whilst in the non-residential sector, permits also fell to $4.3 billion (a drop of 13% from last year), with declines observed in all provinces, except for Ontario, which has been stimulated with the government-backed projects.
“Those focused on the words of policymakers may be surprised to see this dramatic slowdown,” according to Better Dweller, a Vancouver-based news publication: “Despite frequent announcements, rapidly escalating subsidies, and billions in tax incentives, building intentions are still falling. This is potentially a sign that state-backed stimulus is turning counterproductive. Rather than creating an incentive to build, it’s become inefficient with more subsidies producing diminishing returns.”
Housing is also weighing heavily on the US construction market.
The new data comes after Wood Central last week reported that the spiralling costs of building a new home and uncertainty around on-again and off-again tariffs were dragging down the United States’ building and construction industry. It came after data produced by the US Census Bureau revealed that spending on single-family homes and multifamily homes was down 1.1% (to $429 billion) and 0.1% (to $116 billion) in April – with private residential construction falling to just $893 billion, 0.9% down on March and 5% lower than in April 2024.
“Housing demand is sluggish because the cost of buying a home is climbing, and economic uncertainty is making many Americans press pause on big purchases,” according to Redfin, which published its latest report on housing availability last month. “The median home sale price rose 1.4% year over year to $438,466 in April. While that’s the slowest price growth in nearly two years, monthly housing payments still hit a record high last month due to elevated mortgage rates and prices. The average 30-year fixed mortgage rate was 6.73% in April. That’s up from 6.65% the prior month and more than double the record low hit during the pandemic, but down from 6.99% in April 2024.”
