Fewer Condos Under Construction in Montreal
Canada Mortgage and Housing Corporation data indicates that Montreal condominium construction could be starting to slow.
Seasonally adjusted Montreal multi-unit construction starts dropped 5% month-over-month in April, according to CMHC. Multi-unit projects include suites in condo buildings.
On a seasonally adjusted basis, all other Montreal housing types than single-family dropped to 21,499 in April from 22,537 in March, says CMHC.
Those figures contrast with a 62% jump in actual year-over-year multi-unit starts in April.
The monthly decline comes as Montreal is grappling with a plethora of new condo units. Reports indicate that downtown Montreal is dealing with an oversupply of new condo units.
“One developer was telling me as a joke that his biggest competition in the new condo market was not other developers, but it was a condo he built five years ago,” Francis Cortellino, a CMHC economist, told CMHC.
As in Toronto and other markets, Montreal condo investors who purchased suites to rent out are struggling to turn a profit.
“If you take into account monthly mortgage payments, insurance, taxes, condo fees, the rent that you’re asking on the market would not be able to cover those losses,” Cortellino said.
But Montreal is in a different situation than its largest rival, according to the economist.
“The volume of condos in Toronto is way higher than [in] Montreal,” Cortellino told CTV.
Pictured: Arbora condominium building in Montreal’s Griffintown district.
Image: Sotramont
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