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Home construction in London has more than doubled in 2024 over one year prior with builders are breaking ground to meet demand, newly released city hall figures show.
The city issued permits this year to the end of June for 1,565 new homes, more than double the total of 601 for the first six months of 2023. The city’s five-year average for the first half of the year is slightly more than 900 permits.
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“What we’re seeing now is not just new permits. . . . . Now we’re seeing shovels in the ground,” London’s deputy mayor, Shawn Lewis, said.
Lewis cited several factors in boosting construction: A drop in interest rates, improvements to the building supply chain and steps to speed approvals, such as the city adding staff and returning to in-person work at city hall and the Ontario government’s More Homes Built Faster Act.
In addition, city hall has dropped its urban design review panel to speed up the approval process.
“We invited builders to be at the table to suggest ways to improve processes. Now that we have staff back to work in the building they don’t wait weeks for a meeting. There’s better synergy as a team,” Lewis said.
When permits are issued, it’s considered a final step before construction starts, said Mike Wallace, executive director of the London Development Institute that represents builders.
“The demand is coming back. it’s not 100 per cent but it’s better,” he said. “Part of it is due to interest rate reductions. We’re seeing growing demand as London is still attracting people. This is moving in the right direction.”
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In June the Bank of Canada lowered its key interest rate to 4.75 per cent, the first rate cut since March 2020.
In total, the city approved construction of 8,020 new homes in the first half of 2024. But for many of those homes, it could be years before a builder receives a building permit and breaks ground on a project.
That’s why permits issued is the more critical figure, Wallace said.
“No one pulls a permit and sits on it. A permit means a builder is moving forward with the development of a home. It’s a clear indication construction will begin,” he said.
After city council approves a project, additional planning steps are needed such as zoning, site plan and registration of plan of subdivisions, city staff said in an email.
“Building permit issuance is the ‘green light’ for construction,” staff wrote in the email. “Permits . . . represent one of the final steps in the development pipeline process.”
Ontario’s Ministry of Finance has projected the population of London could increase by 239,000 between now and 2046, reaching a total of 685,000. To meet the projected demand, city hall would need to build more than 100,000 new homes over the next 25 years.
“There’s a lot more coming,” Lewis said of home construction. “It may be months, it may be years.”
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