Condo construction booms in Montreal

Condo construction booms in Montreal -

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

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