Recent changes in consumer trends are being observed in the Quebec real estate market, new residential construction has dropped 7.8% since July 2010. According to Canada’s mortgage and housing Corporation (CMHC) there has been a noticeable decline in demand for single detached homes and condos in Quebec. According to Francis Cortellino, the senior market analyst at CMHC, consumers are more interested in semi-detached and row homes. Additionally, multi-residential construction was unusually high in the month of July, while new condo construction dropped 14% since July 2010.
The housing market is still extremely active, which can be partly attributed to consumers trying to take advantage of the low interest rates. Consumers expectations are therefore keeping the housing market very active, there is simply a shift in what the consumers are looking for.
However, economists expect home building to reach a more moderate level of activity in Quebec and spread throughout Canada during the second half on 2011, since current building levels are way above underlying fundamentals.
Finally, according to the CMHC there is no reason to fear over-construction since the absorption rate, an indicator of how long it takes for a new home to be purchased or rented when completed, has remained stable.
For more information visit The Montreal Gazette website.