Residential construction is currently experiencing a slowdown toward levels that over the long term correspond better to the annual growth of households, but several factors are allowing for continued increase in renovation expenses.
This is what the Association provinciale des constructeurs d'habitations du Québec (APCHQ) made public at a news conference when it revealed its economic projections for 2006 and 2007.
Like many other partners in the real estate industry, the APCHQ believes that provincial startups will slow after reaching a peak of 58,448 in 2004. They recorded a 12.9% decrease in 2005. In addition, during the first quarter of 2006 they decreased 10.9 % compared to the same period in 2005 for all of Québec. This decrease will continue over the next 18 months predicts the APCHQ.
Startups for 2006 and 2007 will reach 44 000 and 39 000 units respectively.
“The slowdown in the sector is a natural regression toward the annual rate of growth of households forecast for the next few years, and is estimated at a little more than 35 000 new households,” says Steves Demers, Senior Economist for the APCHQ.
The renovation sector, however, continues climbing toward new heights. Projections for 2006 claim that renovation and maintenance expenses are forecast at $10.8 billion, which is an increase of 8.0% over 2005. And for 2007, the APCHQ predicts that renovation and maintenance expenses will increase at an annual rate of 6.0% to reach $11.4 billion.