Housing construction: “Towards the worst downturn in our history”?

Construction sites were fewer in October 2023 compared to last year, plunging Quebec back into a significant real estate decline which could be the worst in the history of the province, according to an expert.

“The improvement in residential construction in September (+19%) will therefore only have been an interlude. The downward trend resumed in October and, cumulatively for 2023, the decline in housing starts so far is around 35%.

We are still heading towards one of the worst downturns in our history in the same year,” explained Paul Cardinal, director of the Economic Service of the Association of Construction and Housing Professionals of Quebec (APCHQ ).

Thus across the province, collective housing recorded a drop of 21%, with 3,297 new constructions. In total, 3,707 housing construction projects started in October 2023, a drop of 22% compared to October 2022, according to data released Thursday by the Canadian Housing Mortgage Corporation (CMHC). The foundations of 410 new individual houses were built in October 2023 (-29%).

These declines put Quebec back into the rhythm of the last 13 months, while the month of September 2023 saw the only increase in fourteen months.

Gatineau most affected

The Gatineau Census Metropolitan Area (CMA) recorded the biggest drop in housing construction in October 2023 (-57%), closely followed by the Saguenay CMA (-51%) and Drummondville ( -47%).

Conversely, the Trois-Rivières CMA saw an increase in construction of +279% compared to October 2022, which places it far ahead of that of Sherbrooke (+8%).

The Montreal and Quebec CMAs experienced less significant declines, of -37% and -18% respectively. Thus, 1,540 new housing constructions began in October 2023 in Montreal, compared to 671 in Quebec.

Unsurprisingly, it is in Montreal that more than a third of new housing construction in the province is concentrated for regions with more than 10,000 inhabitants.

On the other hand, regions with 10,000 inhabitants or less recorded an increase in construction starts of +25% in October 2023, for a total of 750 new construction sites this month, compared to 600 last year at the same date.