Decline in Residential Construction Continues in Canada Despite Slight Improvement in Housing Starts

Despite a slight improvement in housing starts trends in Canada, residential construction in July continued to register significant declines compared to its past level of activity.

Across the country, according to data from the Canada Mortgage and Housing Corporation (CMHC), the number of new housing starts in July stood at 22,239. down 7% from June.

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In Quebec, the CMHC recorded 2,784 housing starts in July, a decrease of 36% compared to the same period in 2022. This is the eleventh consecutive monthly decline and a thirteenth decline over the past last fourteen months.

Marked declines

“Unfortunately, with the recent rise in interest rates, housing starts will take even longer to emerge from their torpor. In particular, rental construction is currently anemic due to financing conditions, despite the fact that demand is strong in this segment,” explains Paul Cardinal, director of the Economic Department of the APCHQ.

Province-wide, foundations were laid for 471 single-detached homes last month, a decrease of 29 per cent. The decline is a little more pronounced for multi-unit housing, with 2,313 housing starts, a decrease of 38% compared to July 2022.

Regional differences

Residential construction fell in the province’s three main census metropolitan areas (CMAs) in July, namely Montreal (972 housing starts), Quebec (393 housing starts) and Gatineau (132 housing starts), with drops of 54%, 37% and 62% respectively.

On the other hand, the four other CMAs in the province belied the trend, starting with Saguenay, where the 263 housing units started in July 2023 represent five times the number counted in July 2022.