Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

June 14, 2012 08:15 ET

2012-2013 Housing Market Outlook (Province of Quebec)

MONTRÉAL, QUÉBEC--(Marketwire - June 14, 2012) - According to the latest forecasts conducted by Canada Mortgage and Housing Corporation (CMHC), the impact of slower economic growth will be attenuated by still favourable borrowing conditions and demographic factors, which will again support new home construction in Quebec in 2012 and 2013. The current climate of uncertainty regarding economic prospects abroad will call for a more cautious attitude domestically and may lead to less vigorous household spending and private investment in the province this year. This environment, combined with a more balanced resale market, will moderate the demand for new homes.

"In the coming years, demographic factors will sustain the province's housing markets, but at the same time change their complexion. While sustained net migration to the province will continue to have a positive impact on the rental and resale markets, migration numbers are expected to remain stable over the coming years as no significant change in immigration targets is expected. Population ageing, on the other hand, will have a growing impact on the dynamics of the housing market in Quebec, as older households are expected to re-enter the market in response to their changing housing needs," said Kevin Hughes, CMHC Regional economist for the province of Quebec.

In 2011, slower job growth, the recent easing of the resale market and the continuing trend toward the multi-family dwellings have brought down single starts significantly. While a slow recovery is expected over the next two years, a total of 16,200 single-detached homes will be started in 2012. In 2013 single starts will edge up to 17,100 units. More than ever, the rising popularity of the more affordable multi-family homes and densification trends will further cool this market segment in the years to come.

Following a year of sustained construction in 2011, starts of multi-family dwellings will settle back to more sustainable rates in the next two years. Multiple starts will move to 28,100 this year. Looking ahead to 2013, starts of multi-family homes are forecast to be about 28,000 units.

After recording a slight drop last year, sales recorded by the MLS® will edge up in the coming years. For 2012, a 4 per cent increase is forecast. In 2013, the growth rate should slow. Besides the overall economic impacts discussed previously, the ever-growing housing stock will contribute, as it always does, to growth. This year, sales of existing condominiums (town houses or apartments) will moderate. As a result, over 80,000 MLS® sales are forecast in 2012 and over 81,000 in 2013.

Relatively stable demand for resale homes, combined with rising supply, has already taken some pressure off prices in recent months and should continue to do so in the near term. With a return to more balanced conditions, price growth in the resale market will moderate over the course of 2012 and in 2013. For 2012, the average MLS® price is forecast to be $265,000 while 2013 will see an increase to $273,300.

As Canada's national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable housing solutions. 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 informed decisions.

For more information, visit www.cmhc.ca or call 1-800-668-2642.

CMHC Market Analysis standard reports are also available free for download at http://www.cmhc.ca/housingmarketinformation.

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CMHC Housing Market Forecasts: Province of Québec - Spring 2012
2004 2005 2006 2007 2008 2009 2010 2011 2012(f) 2013(f)
Residential Construction (1)
(Starts)
Single Detached (1.1) 28,871 23,930 21,917 22,177 19,778 17,535 19,549 16,554 16,200 17,100
-17.1 -8.4 1.2 -10.8 -11.3 11.5 -15.3 -2.1 5.6
Multi-Family (1.2) 29,577 26,980 25,960 26,376 28,123 25,868 31,814 31,833 28,100 28,000
-8.8 -3.8 1.6 6.6 -8.0 23.0 0.1 -11.7 -0.4
Total 58,448 50,910 47,877 48,553 47,901 43,403 51,363 48,387 44,300 45,100
-12.9 -6.0 1.4 -1.3 -9.4 18.3 -5.8 -8.4 1.8
Resale Market (2)
MLS® Sales 68,268 70,385 71,619 80,647 76,753 79,108 80,028 77,268 80,300 81,100
3.1 1.8 12.6 -4.8 3.1 1.2 -3.4 3.9 1.0
MLS® Average Price ($) 171,774 184,555 195,208 207,531 215,320 225,368 241,456 259,057 265,000 273,300
7.4 5.8 6.3 3.8 4.7 7.1 7.3 2.3 3.1
Other indicators (3)
GDP Growth (%) 2.7 1.8 1.8 2.1 1.3 -0.7 2.5 1.7 1.5 2.0
Employment Growth (%) 1.5 0.8 1.1 2.4 1.2 -0.8 1.7 1.0 0.3 1.7
Total Net Migration (3.1) 36,189 29,035 28,135 30,840 37,091 48,329 45,881 43,905 43,200 44,500
-19.8 -3.1 9.6 20.3 30.3 -5.1 -4.3 -1.6 3.0
(1) source and forecast: CMHC. (1.1) Dw elling for w ich all w alls are detached (1.2) Semi-detached, row or apartment units
(2) source: Canadian real Estate Association, Multiple Listing Service (MLS®), forecasts: CMHC
(3) sources: Statistics Canada, forecasts: CMHC. (3.1) sum of net international migration, net interprovincial migration and net non-permanent residents

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