The past few years have been both good and bad for the Canadian real estate market. Though demand for real estate has increased to some extent, the real estate market is still within a bubble in different provinces of Canada.
But building a home in Canada seems to be different from investing in a condo or apartment in any of the Canadian cities. A non-profit research organization, The Conference Board of Canada, has presented its viewpoint for residential constructions in the country. Although the 14-page report didn’t ring much in the media, it is armed with data demonstrating the huge size of the industry and where it is going in the future.
Canadian home-building in 2017
Multi-unit constructions are likely to drag down the Canadian real estate market in 2017. But there are few other facts that you should be knowing:
- Profits from residential constructions to increase: The Conference Board revealed in its report that they are expecting profits from residential constructions to reach $4.2 billion before deducting tax this year. Pre-tax profits are expected to grow by 4.7 percent in 2017, although residential construction activities are weaker compared to previous years.
- Multi-family dwellings to comprise two-thirds of Canadian homes: Since the recession ended in 2009, Canada’s housing market is making a permanent shift towards multi-family dwellings, such as townhouses and condos. The report revealed that nearly two-thirds of homes in Canada will be multi-family homes this year. These dwellings accounted for less than half of Canadian homes during the mid-2000s.
- Big builders account for small industry share: The Conference Board found that only 5 percent of big residential construction companies claim 20 or more employees. Big builders comprise a small measure of the real estate industry of Canada. The industry is found to be very fragmented and accounts for 686,324 of the total employees in residential construction activities.
- Residential construction revenues to be driven by renovations: Lastly, the report found that nearly 60 percent of revenues from residential construction activities are contributed by renovations. Although an overlooked aspect of the industry, renovations are likely to drive residential-construction revenues this year because limited credit is preventing consumers from taking on large projects.