The total number of starts of residential dwellings decreased last December by 14% compared to the same period in 2004. There were 3,434 new dwellings started in urban centres of 10,000 residents or more.
The December results bring the yearly urban balance-sheet to 41,252 starts representing a decrease of 12% compared to 2004.
These figures were supplied by the Canadian Mortgage and Housing Corporation (CMHC) in its monthly survey.
The 2005 balance-sheet also strongly reflects the forecast made the year before. As we have often said, the very strong level of construction in 2004 was unsustainable taking into account Québec’s economy over the last two years (particularly in the employment sector) with a large availability of existing houses and stable migration. “We still believe that this result indicates a slowing trend. This said, the number of housing starts in 2005 remains relatively high and can be explained within a context where demand is still there,” says Kevin Hughes, CMHC Senior Economist for Québec.
Last December, there was a 10% decrease in single houses in Québec. During this period, 1,161 housing starts occurred compared to 1,291 during the same period the previous year. It appears this result can be attributed to significant decreases in the Metropolitan Regional Census (MRC) of Ottawa-Gatineau (Québec sector) with a decrease of 60%. Montréal decreased to under 11% since construction was slightly up.
In centres with 50,000 to 99,999 people, start-ups increased slightly (+17%) compared to December 2004.
However, during the third quarter, single housing starts decreased by 11% in small urban centres (10,000 to 49,999 people) compared to the same period in 2004.
A notable slowdown was seen in cooperative starts in urban centres, with a decrease of 16% compared to December 2004. These are significant hindrances for: Gatineau (-76%); Sherbrooke (-39%) and Québec City (-16%), compared to the same period in 2004.
The provincial slowdown was exceptionally applicable to the Montréal region with its 1,447 starts. These increased 5% compared to December 2004. Housing starts also increased in the Saguenay region. In centres with 50 000 to 99 999 people, starts decreased less significantly (-4 %), whereas in the third quarter the number of cooperatives that had their sod turned in small urban centres (10 000 to 49 999) people rocketed by 27% compared to the previous quarter in 2004.
”The slowdown in the construction of cooperatives was particularly significant for apartments with co-ownership. Other than the factors which negatively impacted on the overall market, the increase in the stock of cooperatives contributed to slow down in this sector of the market. It is projected that even over the short-term, the construction of cooperatives will decrease. Over the medium-term, demand should continue considering that this type of lodging is attracting more and more people, including retired people” adds Mr. Hughes.
Decrease of 14% in the housing market
