2023-08-17 04:00:00
Residential construction continues to record significant declines from its past level of activity. The situation is pushing some entrepreneurs to put their foot on the brake.
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“You have to know how to withdraw at the right time”, illustrates Catherine Deschambault.
The 38-year-old general contractor and real estate investor is currently busy with her latest project. In March, she laid off the two carpenters she employed, her last two employees.
“There was a lack of work,” notes the entrepreneur.
In less than a month, she will start her new life: heading to the Bahamas on a sailboat with her lover.
“Others continue to do renovations and conversions, but I didn’t want to take that risk anymore. It’s hard to be all in all the time and risk losing everything,” she said.
For 5 years she had her own company. She has led around forty projects. His specialty: buying a quadruplex, renovating it from top to bottom and reselling the 4 properties individually.
“The properties are worth too much, the market is saturated. The risk was no longer worth it, ”says the one who started from scratch at 19 by buying land.
The latest data from the Commission de la construction du Québec (CCQ) tends to prove him right.
While the number of hours worked increased by 5.3% in the first quarter of 2023, compared to that of 2022, that of the residential construction sub-sector fell.
There, hours worked slid 10% from the first three months of 2022. And the trend appears to be continuing: In June, residential construction workers logged 37.4 million hours, a drop of 8% compared to June 2022.
Significant drop in activity
On Wednesday, the Canada Mortgage and Housing Corporation (CMHC) released its latest statistics on residential construction. Data which, once once more, shows a sharp decline in activity, almost everywhere in Quebec.
In July, the number of construction sites was down 36% in Quebec compared to the same month last year. Last month in the country, only Nova Scotia had a worse record, with a 41% drop.
This situation is not new. It appeared with the rapid increases in the key rate by the Bank of Canada, recalls Paul Cardinal, director of the Economic Department of the Association of Construction and Housing Professionals of Quebec (APCHQ).
Housing projects (condominium or rental) are difficult to sell or finance since the Bank of Canada is trying to curb inflation. Many construction sites have been put on hold in recent months.
The consequence, says Mr. Cardinal, is to further amplify the current housing shortage.
The right time to leave
Unlike Catherine Deschambault, the president of Construction Simdev, Luc Simard, remains convinced that the situation will recover quickly.
No way for him to throw in the towel: he is working on the final details of a project of several hundred rental units, the construction of which might begin next spring.
“Without it being a disaster, it is true that everyone in the industry is going through a difficult period,” explains Mr. Simard. Rising interest rates made financing considerably more difficult; you have to adjust.”
He also observes that excavation, electricity and other companies are now much more available than before. “A consequence of this slowdown in residential construction, I imagine,” he says.
The construction industry is still running smoothly if we take into account activity in the institutional and commercial sector, specifies the Association Construction Québec (ACQ).
“Residential investments are down more than 40% compared to last year,” laments its spokesperson, Guillaume Houle.
The moment is badly chosen, according to him, when Quebec needs more than ever to invest in housing “to meet the needs of the population and the companies that wish to settle here and who need housing units. housing to house their workers.
This will not prevent Catherine Deschambault, who has greatly enjoyed her job as a general contractor, from going to see if her happiness lies elsewhere. “I thought regarding it before, but the lack of work confirmed to me that it was the right time to leave,” she says.
HOUSING STARTS BY QUEBEC REGION (JANUARY TO JULY)
Regions (CMAs)
2022
2023
Variation
Montréal
16 219
6899
-57 %
Québec
4850
2591
-47 %
Gatineau
2459
1866
-24 %
Sherbrooke
1034
803
-22 %
Saguenay
379
471
+24 %
Three Rivers
740
786
+6 %
Drummondville
627
304
-52 %
Others*
4687
2774
-41 %
All of Quebec
30 995
16 494
-47 %
*Agglomeration of 10,000 inhabitants or more.
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