Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

November 15, 2010 08:15 ET

2010-2011 Housing Market Outlook (Province of Quebec)

MONTRÉAL, QUÉBEC--(Marketwire - Nov. 15, 2010) - According to the latest forecasts conducted by Canada Mortgage and Housing Corporation (CMHC), a strengthened economy, favourable borrowing conditions and sustained migratory flows will continue to support Quebec's housing markets into 2011.

In addition to public spending on infrastructure projects, both household spending and private investment have grown, while exports have reacted positively to recent improvements in global demand. As a result, economic growth is expected to be 3.0 per cent in 2010, with a moderation to 2.4 per cent in 2011. "A variety of demographic factors will sustain the province's housing markets in the coming year. Growing net migration to the province will continue to have a positive impact on the rental and resale markets. In addition, population ageing and the recent increase in the birth rate will likely prompt households to adjust their housing needs," explained Kevin Hughes, Senior Economist at CMHC for Quebec.

In Detail

Single Starts: Recently, starts of single detached homes have benefited from the improved economic and financial environment as well as from the reduced supply of such homes on the resale market. However, the easing of the resale market will take pressure off of new construction going forward. Approximately 19,000 single detached homes will be started in 2011, but a trend toward more affordable housing and densification will further cool this market segment in the years to come.

Multiple Starts: Following a strong rebound in 2010, starts of multi-family dwellings will settle back to more sustainable levels next year. Given the current elevated supply of condominium apartments on the market and the lower growth rate of the population aged 75 and over, starts of multiple family homes in 2011 will decline. Nonetheless, the trend towards multi-family housing will help push multiple starts to around the 26,000 unit mark in 2011.

Resales: Following a strong recovery in 2009, which was extended into the first quarter of this year, MLS® sales have moderated. For next year, resale activity is expected to remain stable. Sales of existing condominiums (town houses or apartments) will be an important component of the segment. The Multiple Listing Service (MLS®) will record over 80,000 unit sales in 2011.

Prices: Decreasing demand for resale homes, combined with rising supply, will take pressure off prices over the course of the next year. With a return to more balanced conditions, price growth in the resale market will be modest in the second half of 2010. The average MLS® price is forecast to increase by 2.5 per cent in 2011.

Mortgage Rates

According to CMHC's base case scenario, posted mortgage rates will remain flat in the second half of 2010 and in 2011. For 2010, the one-year posted mortgage rate is assumed to be in the 3.0 to 3.7 per cent range, while three and five-year posted mortgage rates are forecast to be in the 3.2 to 6.1 per cent range. For 2011, the one-year posted mortgage rate is assumed be in the 2.7 to 3.7 per cent range, while three and five-year posted mortgage rates are forecast to be in the 3.5 to 6.0 per cent range.

Rates could, however, increase at a faster pace if the economy ends up recovering more quickly than presently anticipated. Conversely, rate increases could be more muted if the economic recovery is more modest in nature.

As Canada's national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making vital decisions. For more information, visit www.cmhc.ca or call 1-800-668-2642.

CMHC Housing Market Forecasts: Province of Québec - Fall 2010
                               
  2004   2005   2006   2007   2008   2009   2010(f)   2011(f)
                               
Residential Construction (1)                              
  (Starts)                              
                               
  Single Detached (1.1) 28,871   23,930   21,917   22,177   19,778   17,535   19,375    18,750
      -17.1   -8.4   1.2   -10.8   -11.3   10.5    -3.2
                               
  Multi-Family (1.2) 29,577   26,980   25,960   26,376   28,123   25,868   30,975    26,250
      -8.8   -3.8   1.6   6.6   -8.0   19.7    -15.3
                               
  Total 58,448   50,910   47,877   48,553   47,901   43,403   50,350    45,000
      -12.9   -6.0   1.4   -1.3   -9.4   16.0    -10.6
                               
Resale Market (2)                              
                               
  MLS® Sales 68,268   70,385   71,622   80,649   76,762   79,290   80,000    80,500
      3.1   1.8   12.6   -4.8   3.3   0.9    0.6
                               
  MLS® Average Price ($) 171,774   184,492   195,171   207,530   215,307   225,412   240,300    246,300
      7.4   5.8   6.3   3.7   4.7   6.6    2.5
                               
Other indicators (3)                              
                               
  GDP Growth (%) 2.7   1.8   1.7   2.8   1.0   -1.4   3.0    2.4
                               
  Employment Growth (%) 1.4   1.0   1.3   2.3   0.8   -1.0   2.0    1.4
                               
  Total Net Migration (3.1) 36,189   29,035   28,135   30,879   38,459   49,432   50,000    52,000
      -19.8   -3.1   9.8   24.5   28.5   1.1    4.0
                               
 
(1) source and forecast: CMHC. (1.1) Dwelling for wich all walls are detached (1.2) Semi-detached, row or apartment units      
(2) source: Canadian real Estate Association, Multiple Listing Service (MLS®) historical data and forecasts based on information available up to April 23rd. 2010  
(3) sources: Statistics Canada, forecasts: CMHC. (3.1) sum of net international migration, net interprovincial migration and net non-permanent residents  
 

Contact Information

  • Province
    Kevin Hughes
    Senior Economist
    514-283-4488
    or
    Montreal
    Bertrand Recher
    Senior Market Analyst
    514-283-2758
    or
    Gatineau (Outaouais, Abitibi)
    Patrice Tardif
    Senior Market Analyst
    514-283-2097
    or
    Saguenay
    Sebastien Paquet-Poirier
    Market Analyst
    418-649-8102
    or
    Sherbrooke (Estrie)
    Francis Cortellino
    Senior Market Analyst
    514-283-8391
    or
    Trois-Rivieres (Mauricie)
    Marie-Elaine Denis
    Market Analyst
    418-649-8100
    or
    Quebec
    Elisabeth Koulouris
    Senior Market Analyst
    418-649-8098