Building permits one more sign of the vanishing single-family home in Canada

The single-family home has long been a symbol of the middle-class dream, but its prominence on the Canadian real estate landscape is fast fading away, with the latest sign of its demise coming in the form of a prolonged slump in building permits.

In June the value of building permits for single-family homes – detached houses – fell 35 per cent from the year before to $2.5-billion. After adjusting for inflation in real terms, building permits for such homes were near the lowest levels reached in the early months of the pandemic.

In fact, the real value of permits for single-family homes – once the largest construction segment for permits – has now fallen below that of the commercial sector, which includes the beleaguered retail and office sectors.

The decline in permits for single-family homes is just the latest evidence of a shift that took hold after the Great Recession. For decades, builders had constructed more single-family homes than units in multifamily buildings such as apartments, condominiums and row houses. But after 2010, the situation reversed, and over the past four quarters multifamily housing starts outnumbering detached homes 3-1, according to the Canada Mortgage and Housing Corp.

A 2019 report from BMO

 senior economist Robert Kavcic analyzing the already widening gap at the time between single and multiunit starts put it bluntly: “No more detached homes for you.”

The trajectory for single-family homes is unlikely to reverse. To address housing shortages, cities and provinces are emphasizing more housing density by building up, while greenspace rules continue to hamper developers from building out.

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