In 1990, condos represented only 13% of total construction starts, and this share increased to 35% last year. This condo construction boom slowed particularly in the Montreal region due to aging of the population, the decrease in the size of households and the scarcity of land in urban settings.
The CMHC believes that from a purely conjunctural viewpoint that construction of condominiums is required to slow during the coming months. Experts say this slowdown is even necessary.
''In order not to unbalance the market by creating a surplus of condos, it is understood that over the short-term contractors should slow down their building rhythm.”
Some 8 000 housing units will be started this year, or a decrease of 9%. This number should decrease to 7,000 next year which will lead to a decline of 13%. In order to liquidate the units already built and not sold, promoters must again lower their prices.
Construction of condos in downtown Montréal should also slow. In March last year, there were only 225 condos built and vacant in this sector of the City. This is nothing to be alarmed about s during the same period, 2,200 others were under construction. ''As only 730 units were sold in 2005, the volume of condos that will soon be on the market appears to be disproportionate to demand. Experts believe that two years minimum will be needed before selling all these units. »
A slowdown in the construction of condos is expected but necessary
