Quebec should finally post an increase in new housing starts in 2024 after having aligned 17 months of almost uninterrupted declines between April 2022 and November 2023. For the third time in four months, the number of housing starts recorded an increase, but their numbers, however, remain light years away from being able to meet domestic demand.
The housing crisis was at the heart of the last federal budget. We have increased measures and programs to stimulate the construction of new housing units in the country.
More than 5 million new housing units would need to be built to meet the needs of Canadians and newcomers by 2030, according to the Canada Mortgage and Housing Corporation (CMHC).
In her latest budget, Minister Chrystia Freeland said she hoped that the new programs put in place would allow the construction of at least 3.8 million new housing units by 2030, which still leaves us far from the threshold. affordability calculated by CMHC.
In Quebec, the situation is not rosier. The CMHC has already estimated in 2022 that the number of construction starts would need to be tripled to 150,000 new constructions per year for the Quebec housing market to become affordable again and finally find a point of balance.
In March, Quebec recorded 2,252 new construction starts, which represents a gain of 25% compared to March 2023. The foundations of 293 individual houses were poured in Quebec’s urban centers, which represents an increase of 31 % compared to 2023.
“The market for individual homes has been even more strongly marked by the context of the last two years. We have just recorded three months of successive increases in 2024, while we had suffered 28 months of consecutive declines from September 2021 to December 2023,” observes Paul Cardinal, director of the Economic Department of the Association of Construction and Construction Professionals. of Quebec Housing (APCHQ).
On a seasonally adjusted and annualized basis, the number of new housing starts amounted to 35,780 in March, which still places us far behind the 150,000 housing starts desired by CMHC.
Mr. Cardinal predicts that after having suffered a decline of 32% in 2023, the Quebec residential construction market should record an increase of 13% to 44,000 new units in 2024 and 14% in 2025 which would increase the number of new constructions at 50,000.
We are obviously expecting and hoping for a first reduction in interest rates at the start of summer which would have the effect of stimulating the appetite of potential buyers of new homes and putting real estate developers back to work.
A market that is looking for itself
After the record year of 2021 during which more than 67,000 new homes were built in Quebec, all types of housing are showing declines in all markets.
Sales of new condos and detached houses in Montreal are in free fall because prices have increased too much and the rise in interest rates has completely dampened the enthusiasm of households to acquire this type of housing. .
Many real estate developers have decided to convert phases of their condo project into rental housing because they can no longer find buyers for units that are too expensive to buy.
New rental housing projects are also slowed down by high interest rates and capital which is becoming more scarce due to high construction prices.
In the Freeland budget, an additional amount of $15 billion was provided, financed by CMHC, to allow real estate developers who want to build rental housing to have access to low-interest loans.
It is estimated that this program will be able to support the construction of 100,000 housing units by 2031, which is a step in the right direction, but which still leaves us far from the 5 million additional housing units that Canada must build to meet minimum requirements. needs of its population by 2030.
In Quebec, the issues are the same. We must considerably increase the rate of new housing projects and increase the rate of construction of new units.
In the current conditions of the job market and the permanent shortage of several categories of trades, it is completely illusory to think that the residential construction industry will one day be able to start more than 150 jobs. 000 new housing units in one year in Quebec.
The more realistic objective that the industry could achieve would be to increase the number of new constructions by 10,000 units per year and to reach 60,000 construction starts by 2026. Let’s stay positive and realistic.
reference: www.lapresse.ca