OTTAWA – Montreal’s housing crisis is likely to get worse as fewer housing units have been built in the metropolis in 26 years, according to the latest data from the Canadian Housing Corporation and Housing (CMHC) released this morning.
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Of Canada’s six largest metropolitan areas (CMAs), Montreal is the one with the fewest housing starts in the first quarter of 2023, with just 5,927 units across all housing types combined. That is 58% fewer construction starts than in the same period last year.
“In the Montreal CMA, the decline is particularly steep across all housing types. “It is so significant, in fact, that it wiped out much of the growth in Vancouver and Toronto in the overall data for the 6 CMAs,” notes CMHC.
Edmonton, Toronto and Ottawa also recorded a decline in housing starts, although significantly less than in metropolitan Quebec. Only Vancouver saw an increase in housing starts (+49%), while Calgary recorded the same number of housing starts as the previous year.
Compared to Toronto and Vancouver, where condominium skyscrapers abound, “in Montreal we are generally building a greater number of small and low-rise buildings” for the rental market, the CMHC explains.
“They require less time to design and construct,” but their developers “generally cannot raise capital through preconstruction sales,” as do those who build condominiums, the federal agency continues.
They are therefore much more vulnerable to worsening financial conditions: rising construction costs, rising interest rates and limited access to credit.
As for apartments built for sale, there are more and more of them unsold in Montreal, which doesn’t encourage developers to build more. The Quebec metropolis is among the metropolises where the inventory of new unsold housing increased the most compared to the first quarter of 2022, with a fluctuation of 52.2%.