Canada’s Construction Investment May Be Pausing To See If Work-From-Home Sticks

The consensus is work-from-home is temporary, but real estate developers might not be so sure. Statistics Canada (Stat Can) data shows construction investment reached a high in January. The trend is driven by residential construction investment, which reached a new record. Non-residential construction showed minimal growth, and is now effectively negative in real terms.

Canadian Building Construction Investment Reaches A Record High

Canada’s construction investment started the year off with a new all-time high. The seasonally adjusted total reached $16 billion in January, up 2.8% from the month before. Residential construction investment represented $11.6 billion of the total, up 3.9% over the same period. The rest was $4.4 billion in non-residential construction investment, just 0.2% higher. One segment is definitely showing much more growth.

Canadian Construction Investment

Canada’s seasonally adjusted total construction investment.
Source: Stat Can, Better Dwelling.

Construction investment growth was driven almost exclusively by the residential segment. January was both a record for total construction investment, and the residential subcomponent. Residential construction now accounts for a record 72.3% of the month’s dollar value. Non-residential investment showed small growth, which is better than being negative. However, it was also down 18.1% from peak investment.

Canadian Construction Investment

Canada’s seasonally adjusted construction investment, by residential and non-residential components.
Source: Stat Can, Better Dwelling.

Toronto Construction Investment Underperforms National Growth

The Toronto CMA represented almost a fifth of construction investment. The seasonally adjusted total reached $3.0 billion in January, up 1.3% from the month before. The residential portion represented $2.1 billion of the total, increasing 1.7% over the same period. The remaining non-residential portion was reported at $969.7 million, 0.3% higher. 

Toronto is underperforming the rate of growth due to slower residential growth. The residential rate is growing at about half the rate of the national number. As slow as it is, that rate is still 5x larger than the rate of growth for non-residential investment. The non-residential component would be negative in real terms.  

Vancouver Construction Investment Peaked In 2019

Vancouver CMA has half the construction investment of Toronto, but is growing faster. The seasonally adjusted total reached $1.4 billion in January, up 2.1% from a month before. Residential construction represented $1.0 billion of the total, up 2.5% over the same period. Non-residential represented $424.3 million, 1.1% higher.  

Vancouver’s rate of growth is higher than Toronto, but it’s a lot lower from peak growth for the region. Residential construction investment is slower than the national rate. In fact, peak investment for the city was all the way back in May 2019. Yes, before the pandemic. Non-residential construction is growing faster than the national rate. This is a positive note, however, investment in the segment is still below the dollar volume peak seen in 2019.

There’s record construction investment, but the trend is driven almost entirely by the residential segment. Low rates typically drive investment for all segments, so this is interesting. Most investment is being sunk into residential construction, while non-residential slows. The slowdown in the latter may be indicative of developers taking a wait and see approach to the post-pandemic world. Especially since a rise in work-from-home can seriously disrupt the revenues of commercial and industrial space. 

Like this post? Like us on Facebook for the next one in your feed. 



We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Yan 3 years ago

    Building office space right now is about as risky as buying a house in the country because you think you’ll never have to go back to work again.

  • Whiskey Foxtrot 3 years ago

    Be interesting to know if this is office or retail slowing. I see most condos putting in ground space retail, but I can’t imagine building a new office tower while companies are consolidating.

  • Austin 3 years ago

    If that’s the case make no mistake that the government will do everything possible to kill work from home.

Comments are closed.