Fredericton Sees A Sharp Rise In Demand For Residential Building Construction
FREDERICTON – Numbers provided by Fredericton’s Economic Vitality Committee show high residential development with lower commercial development in 2020 in the face of the pandemic.
The total value of construction over 2020 was $158.5-million, well over the ten-year average of $117-million.
The value of residential construction stood at $96.4-million in 2020, a dramatic increase from 2019, where the value was $54.8-million. It’s also well above the ten-year average of $58-million per year.
“The demand for housing is very high,” said Councillor Bruce Grandy, chair of the Economic Vitality Committee. “We have immigration into the city of approximately 1,500 to 2,000 people a year, so our population is growing.”
2020 saw a large number of multiple-unit buildings start construction compared to past years. 555 total units were started compared to a 10-year average of 317 units/year.
Single detached dwellings saw a figure consistent with the 10-year average at 86 units beginning construction, slightly above the 10-year average of 83 units/year.
“There’s not a lot of those big subdivisions [in development] anymore, more people want to live in a more compressed area, in the vibrancy of the city,” said Grandy. “A lot of people want to be able to walk to the grocery store and they want to be able to get to doctors and they want to do their shopping more locally than they do out in the periphery of the city.”
“When you look at multi-units, that’s what’s being built in these growth areas, while single-family detached are being built in the periphery of those growth areas. The demand for apartments, condos and the like are very high right now.”
The average permit value, which is the estimation of the construction value of a property, reached a 10-year high of $258,059 in 2020. Grandy was pleasantly surprised by this number, particularly with the pandemic’s potential to impact the results.
“I think what you’re seeing is that even with Covid, people still have to have a place to live, people are still coming to our city and people like the idea of living in Fredericton,” said Grandy. “We have a lot of confidence in our developers who are putting these buildings in and spending millions of millions of dollars putting these multi-residential buildings in.”
Grandy says the construction of multi-residential units will help lower rent costs in the longterm as it will increase the city’s vacancy rate, which currently sits at 2.5 percent according to the Canada Mortgage and Housing Corporation.
“We need this construction because one of the problems in Fredericton right now is that rent is skyrocketing,” said Grandy. “In order to have some rent adjustment, you have to have competition and in order to have competition, you need to have a decent vacancy rate.”