News
Canada's residential construction industry
threatened
The U.S. tarifs and Canadian replica could disrupt Canada’s residential construction sector.
The proponents anticipate higher construction costs and supply chains affected by US tarifs that would affect many parts of the industry.
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The US tarifs would increase construction costs by about 4% according to contractor's estimates in the field. Tarifs will drive up house prices.
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For nearly thirty years, manufacturers have developed significant operations on both the U.S. and Canadian side of the border because building houses often involves large-scale materials.
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Not only did the U.S. president mention that he would impose 25% tarifs on most Canadian imports, but Canada also stated that it would respond with tarifs on some U.S. products.
These new measures would have a significant impact on real estate.
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05 / 02 / 25
A return
in 2025
Economists and real estate agents agree that activity should remain high if borrowing costs remain low, which is generally more favourable to buyers despite a difficult accessibility situation.
With the Bank of Canada’s 3.25% policy rate announced last December and recent changes to federal mortgage rules, everything should help drive up home sales and prices.
These new mortgage rules, which came into effect last December, included the extension of the maximum mortgage amortization period to 30 years instead of 25 years for first-time home buyers and the limit on an insured mortgage loan from $1 million to $1,$5M.
Another benefit for buyers is the decision of the Office of the Superintendent of Financial Institutions (OSFI) announced last September to end the stress testing for uninsured mortgage transfers. A policy whereby lenders apply the minimum qualifying rate to direct changes when they are renewed in another institution according to the borrower’s amortization schedule and loan amount.
Given declining interest rates, the likelihood of continued economic growth and new federal government measures, 2025 looks good for real estate.
However, other factors such as political uncertainty on both the Canadian and US levels and the labour market remain important issues in evaluating the housing situation in 2025.
17 / 01 / 25
2025 real estate market:
a vulnerable year
This is what the Association des professionnels de la construction et de l'habitation du Québec (APCHQ) states in one of their annual report on the real estate market status.
With the border's tax uncertainty being a new issue, economists believe that Canada could be in a recession soon and face a rapid cost of living inflation.
To avoid the adverse effects of such a measure on the housing and construction market, APCHQ is seeking the government's assistance. The agency said that even if these taxes are not implemented, both the federal government and the provincial and municipal governments need to provide additional support for these two sectors.
According to the APCHQ, the federal government could improve the GST rebate on new properties and the Homeownership Program (HBP) into intergenerational programs that could provide more assistance to young buyers.
Also they believe that the provincial government could be more generous in its support for energy-efficient renovation of residential buildings. The CAQ’s building decarbonization targets result in increased construction costs for new buildings.
Cities could ensure adequate investment in infrastructure to allow for faster densification of certain neighbourhoods, particularly water systems. Transportation networks could also be improved to facilitate access to housing in denser neighbourhoods, even if they are further away from urban centres.
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07 / 01 / 25
Property sales continued to rise in December
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According to data from the Association professionnelle des courtiers immobiliers du Québec (APCIQ), residential sales continued to increase in December 2024 in the Montréal region, with 54.1% of properties sold compared to the same month last year.
There were 3,193 property sales in the Montreal area for the month, up from 2,072 sales in December 2023, with a year-over-year increase of more than 40%.
An increase of 13.5% in the average price of housing was also observed from year to year, with a plex price at $794,500. The median price of a single-family home increased by 8.4% to $580,000 and the median price of a condominium rose by 7.2% to reach $419,550.
In December, 2,724 new registrations were noted in the Montreal region, an increase of 10.9% compared to December 2023.
The latest data from a report by National Bank estimates that cumulative sales in 2024 increased by 20.5% compared to 2023, being the highest level of activity since 2021.
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11 / 01 / 25