Residential construction in Canada to expected to experience flat growth
September 26, 2012
New regulations for mortgages that went into effect in July are one of the many reasons the Conference Board of Canada, an Ottawa-based think tank, believes the residential construction industry will have a "soft landing," shifting from slow growth to potentially being flat, finishing out 2012 and leading into 2013.
"The residential market is destined for a soft landing, which means that it will no longer be able to fuel Canada's post-recession growth," said Michael Burt, the director of industrial economic trends at the CBC. "Next year is expected to be particularly lackluster, as housing starts and industry profits are both forecast to decline."
Throughout the last few years, the Canadian residential industry has been booming with numerous condos and skyscrapers going up throughout Toronto, as well as many of the country's largest cities. However, housing starts and industry profits are both forecasted to decline, which is expected to put a wrench in the cogs of residential construction.
With the worldwide economy suffering, the Canadian economy had been relying upon on the construction of new buildings in past months. A struggling economy leads to fewer Canadians interested in purchasing property. Many Canadians could be affected by the slowing of residential construction. The Wall Street Journal referenced statistics from the Building Industry and Land Development Association, which found residential construction employs 193,000 people in the Toronto area, and 856,000 across Canada.
Residential construction looking up in Halifax
Numbers throughout the country may not be positive, but the Canada Mortgage and Housing Corporation recently found new residential construction in Halifax increased in August compared to one year ago.
"The increase in residential construction activity last month was largely attributed to an increase in multiple starts, specifically apartment-style construction," said Matthew Gilmore, senior market analyst with CMHC's Atlantic Business Centre. "There were 311 apartment starts recorded in August compared to 124 last year."
Many home builders take advantage of solutions such as construction software, which allows firms to better manage projects to stay within budget and on schedule.