MONTREAL – Single family resales may be on the rise in the Greater Montreal Area, but when it comes to new construction, condo development is still booming.
In July, new housing starts in Greater Montreal rose five per cent, year over year, because of a 23 per cent rise in condo starts, the Canadian Mortgage and Housing Corp. said Thursday. On Montreal Island, starts rose 51 per cent last month, because of an increase in condo and rental starts.
Year to date, even as total housing starts dropped five per cent in Greater Montreal, new condo construction rose 11 per cent above the record-breaking level in 2011.
Analysts expect new home construction to soften this year, both in Montreal and across Canada.
Nationally, Canadian housing starts fell more than expected in July on a decline in multiple-unit projects in British Columbia. Construction of new homes dropped 6.1 percent from June to a 208,500 seasonally adjusted annual pace, the CMHC said.
The report adds to recent data from real estate boards that suggest Canada’s housing market is slowing, in part as policy makers take steps to rein in household borrowing. The value of purchases at eight major regional real estate boards that have reported figures for July fell 2.6 percent from a year earlier, according to data compiled by Bloomberg.
“There have been signs of moderation in existing home sales in recent months and we expect further easing to occur through the remainder of the year,” David Onyett-Jeffries, an economist at Royal Bank of Canada in Toronto, said in a note to investors.
Canadian home prices will decline 10 percent over the next two to three years, and the country’s housing market faces a prolonged period of modest sales and price gains, Bank of Nova Scotia economists said in a report Wednesday.
Bloomberg News contributed to this report
By Allison Lampert, THE GAZETTE – August 9, 2012