Residential construction should slow down a bit this year

Photo: Sean Kilpatrick, The canadian Press
2017 was completed with a total of 202 000 new dwellings in centres of 10 000 inhabitants or more, or an increase of 12 % compared to the previous year.

The coming year should be good in terms of residential construction, without be as strong as that which has just been completed.


The pace of housing starts slowed down somewhat in December in Canada, after having experienced its best month of the year in November, reported Tuesday, the canada mortgage and housing corporation (CMHC) in unveiling the first official statistics to draw up the balance sheet of 2017. This small settlement by the end of the route has not prevented to finish the year with a total of 202 000 new dwellings in centres of 10 000 inhabitants or more, or an increase of 12 % compared to the previous year and the highest total since 2004.


This beautiful effect has been particularly strong in the construction of condominiums, rental apartments, private residences for the elderly and other collectives, which increased by 16 % (from 120 000 to 139 000) in 2017, compared to an increase of 5 % for single-family homes (61 000 63 000).


The progress has been still more impressive in Quebec with a jump of 25 % in the number of housing starts last year (from 33 000 to 41 000) and 31 % for the only collective housing (26 000 to 34 000). This growth in quebec has mostly been the metropolitan regions of Montréal and Québec city, both of which have seen an increase in their total housing starts up 39%, and where the construction of collective housing has respectively increased 43% and 50%.


This phenomenon may be explained by the good performance of the economy and the job market, the low interest rates, a resale market that is no longer sufficient and high net migration, ” said CMHC. The enthusiasm for the collective housing correspond, as to him, a trend that had seen a slight slump in previous years, but who has taken the most beautiful, served well by factors such as their better affordability, densification of cities and the aging of the population, – has explained in telephone conversation with the Duty economist at CMHC, Kevin Hughes.


Still good, but a little less


The general context is expected to remain favorable for at least the next two years, but it would be surprising that growth is also strong, he says. “The pace of construction of new housing is already equivalent and may be superior to that of the formation of new households. You can’t go much faster than that. “


It is not the only one thinking this, also by reason of the entry into force, on 1 January, new rules requiring banks to test the degree of resistance of their clients to potential interest rate increases before they are granted a mortgage, as well as of the expected rise, this year, the famous interest rates by the Bank of Canada. “A slowdown in the housing market at the beginning of 2018 seems obvious, warned, Tuesday, Benoit P. Durocher, senior economist at Desjardins group. Now the question is what will be its magnitude and, most importantly, it will be quickly followed by a rebound. “


“A reissue of the performance of 2017 is unlikely,” she said Tuesday, Jocelyn Package. The economist of the National Bank is, however, expected that the new tightening of rules for mortgage and rising interest rates have more impact in Toronto and Vancouver than in Montreal, “simply because there is more debt,” he noted in a telephone interview with the Duty.