In Montreal, 70% of construction starts in 2023 were intended for the rental market, which contrasts with the rest of Canada, which is more focused on the construction of condos.
Despite everything, these are figures that are beyond CMHC's forecasts for 2023.
After reaching record and near-record highs in 2021 and 2022, housing starts declined in 2023, but still significantly exceeded expectations for the year, according to the most recent report, dated January 16.
Moreover, the CMHC noted a rebound last December and November.
Across the country, the monthly seasonally adjusted annualized number of housing starts increased 18% in December (249,255) compared to November (210,918), the report said.
Félix Frégeau, president of Frégeau Construction, in Quebec, notes this slowdown daily, particularly for the construction of single-family homes.
In 2023, I didn’t have a single-family home to build. Yes, we feel a certain drop. Rising material costs, mortgage rates, inflation […], it's a bit of all that, notes the entrepreneur. It's difficult to make exact budgets for clients […] and give them the right price based on the price of materials. It fluctuates so much!
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Félix Frégeau, president of Frégeau Construction
It is in Quebec that the decline is most pronounced among all Canadian provinces, laments Paul Cardinal, director of the economic department of the Association of Construction and Housing Professionals of Quebec (APCHQ) .
The rise in interest rates had the effect of slowing down more real estate projects in Quebec than elsewhere due to construction sites which are generally shorter and smaller in size, according to him.
2024 is expected to be slightly better in the construction industry. We expect a small increase in 2024, but nothing spectacular, perhaps of the order of 10 to 12%, warns Paul Cardinal.
Lower interest rates and strong demand for rental housing construction should provide a breath of fresh air.< /p>
The abolition of GST on rental construction projects should also provide a boost.
The mayor of Quebec, who wants the construction of 80,000 new housing units to be built by 2040 in Quebec, or 5,000 per year, is not overly concerned.
The pandemic has made a much more important construction exercise, the economic conditions after the pandemic have hurt us like everywhere. Currently things are going well, said the mayor on Tuesday, a few hours before the municipal council meeting.
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Bruno Marchand, mayor of Quebec.
The 80,000 for 2040 is still the target and it will not change.
A quote from Bruno Marchand, mayor of Quebec
Bruno Marchand says have good hope of making up for the delay recorded in 2023. We have good figures which are catching up in the last few weeks. Our permit issuances in recent weeks are also going well. We are confident of catching up with this kind of initiative that we lost in 2023.