Statistics Canada has just released the most recent building permit numbers and they show that municipalities issued building permits worth $6.8 billion in March 2011, a 17.2% increase from February and a level not seen since June 2007. Moreover, the gain was mostly the result of advances in the residential and non-residential sectors in Ontario.
A look at the Ontario numbers show that year over year (March 2010-March 2011) Ontario is up by 37 percent with residential permits up 16.5 percent and non-residential permits up by 71.2 percent. However, an examination of the year over year permits by Ontario Census Metropolitan Area (CMA) suggests that much of the growth is concentrated in the Toronto area which is not a surprise given the size of the Toronto CMA. Indeed, the share of permits is much greater than Toronto's population share. In March 2011, Toronto accounted for about two-thirds of the value of building permits issued in Ontario and also about forty percent of the value of permits issued in Canadian CMAs. The year over year value of permits is actually down in Thunder Bay, London, Guelph, Brantford, Kingston, Hamilton, Peterborough and even Ottawa. Windsor and Oshawa appear to be on the mend in the post auto-sector downturn world. When the numbers outside of Ontario are examined, they show that many other Canadian CMAs are also down. Indeed, the three highest growth rates were in the Toronto-Barrie-Sudbury axis (followed by Moncton). There was negative growth in building permits in much of Quebec, Atlantic Canada and even out West. Indeed, if you take Toronto out of the Canadian CMA numbers, it turns out that while the value of permits in Toronto went up 104 percent over the March 2010 to March 2011 period, the value in all the other CMAs combined actually declined by one percent.
Worthwhile Canadian Initiative 
Hmmm. I didn’t realise that the pickup in activity here in TO wasn’t part of a wider trend. I can’t say the recession had much impact at all on real estate investment. The winter of the panic sales slowed but had picked up again by the late spring of 2008.
The aggregate pickup of residential building permits should be of some concern for policymakers, who are attempting to reduce household debt loads. This is not an encouraging sign for a sector that is ostensibly overbought. The data are somewhat noisy but if elevated permit applications remain strong through the spring it would be surprising if the government doesn’t take more aggressive action to reduce credit availability.
I love these over-looked indicators which can be enormously useful for revealing or predicting the true state of the economy. I find them far more interesting than the usual blunt instruments we are subjected to.
Perhaps I’m missing something, but it seems to me that for some areas this reflects local zoning bylaws more than general economic growth.
Current condo sale prices in Vancouver are double the marginal cost of adding new floors – I have no doubts that there would be significantly more construction were it permitted.