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Spotlight on Housing

Construction and Renovation: Rising Costs and Interest Rates Take Their Toll

November 9, 2022
Hélène Bégin
Principal Economist

Quebec’s housing market continues to cool. Existing home sales are down, and the average sale price has dropped 5.5% since peaking in April. Housing starts came in at an annualized 50,123 units in September, a 19.7% year-over-year decline and nearly 60% off the all‑time high in January 2021. Higher borrowing costs are also slowing renovation spending, which started trending lower this spring in volume terms. And while resale prices continue to fall, construction and renovation costs remain elevated, further dampening activity. Rising interest rates haven’t yet had their full effect on the housing market, so existing home sales, new construction and renovation spending will continue to weaken over the coming months.