The inflationary effects are being felt: considerable drop in housing starts

The Sherbrooke region recorded a considerable drop in the number of housing starts of 54%, the largest drop in Quebec.

The inflationary effects are being felt: considerable drop in housing starts

The Sherbrooke region recorded a considerable drop in the number of housing starts of 54%, the largest drop in Quebec.

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Unlike the past two years, the construction environment is starting to slow down. In June 2021, 249 sites began construction, compared to 114 in June 2022.

This slowdown was anticipated by the Canada Mortgage and Housing Corporation (CMHC). Housing starts had accelerated in the past two years, due to low borrowing costs and strong housing demand. The current pace is beginning to resemble the same as the city experienced before the pandemic, when Sherbrooke experienced, in June 2019, 115 housing starts.

“What we are seeing now is that the scarcity of materials and the shortage of labor are slowing down housing starts,” said CMHC economist Nathan R. Lea.

On the side of construction companies, this phenomenon is well and truly observed.

“It’s quite worrying with the housing shortage we are currently experiencing. […] We see that there is a slight decrease in housing starts and activity on construction sites, ”said the general manager of Entreprises Lachance, Patrick Lachance.

Last March, the council of the Ville de Sherbrooke voted a regulation so that developers bear more costs, particularly when creating streets in new real estate projects.

“It is more and more complex, long and expensive to make new streets. There is a lack of land that is starting to be felt, which is causing construction to be delayed,” said Patrick Lachance. In Quebec, the considerable drop in the number of housing starts is 19%.

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