Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

November 18, 2009 23:59 ET

CMHC Housing Outlook Conference

MONTREAL, Nov. 18 - Canada Mortgage and Housing Corporation (CMHC) presented its annual Housing Outlook Conference entitled "New Phase to Interpret" today to about 1,000 industry professionals. At this event, CMHC's experts gave an overview of the situation across the province, provided a detailed health check of the real estate market in the Montréal area and presented their forecasts for 2010.

Across the province

As a result of improving global and national economic conditions, Quebec's economy, which has been contracting since the end of 2008, will begin to recover in the latter part of this year. Domestic consumption is already showing signs of growth while fiscal and monetary policy will continue to stimulate the economy. CMCH thus expects the Quebec economy to grow by 2.1 per cent in 2010. Nevertheless, firms will be slow to add to their payrolls and the province's labour market will grow at a slower rate. Job growth of less than one per cent is expected in 2010.

According to CMHC, 43,000 starts are expected in the province in 2010. Sales of existing homes will surpass the 78,000 mark next year. "In 2009, a weaker economic environment, combined with increased supply of homes in certain market segments, lowered housing construction in Quebec. In 2010, a recovering economy, still favourable borrowing environment and a tighter resale market will translate into sustained new home construction," said Kevin Hughes, Senior Economist at CMHC.

Montréal area

Resale market to remain stable

In 2009, after beginning the year with a major decrease in transactions, the resale market was surprisingly vigorous starting in the second quarter. This was noted in all large sectors of the Montréal census metropolitan area (CMA). Overall, sales in the CMA should end 2009 slightly behind 2008 (-0.8 per cent). Given the rather weak economic recovery and stagnant employment level, though, the volume of transactions will post only a small increase in 2010 (+1.0 per cent). In all, 40,500 properties will change hands in 2010.

The anticipated small rise in mortgage rates during the second half of 2010 will contribute to the easing of the resale market, which will again start moving toward balanced conditions. The average price will reach $279,000 (+3.0 per cent).

New home market

In all, 18,300 dwellings will get under way in 2009, or 16.5 per cent fewer than in 2008. In 2010, starts should fall by 1.1 per cent from 2009, to 18,100 units. "While the annual starts volumes surpassed the 20,000-unit mark in the last seven years, meeting a latent demand that had not been expressed at the end of the 1990s, the starts level forecast for 2010 will be more in line with the rate of household formation in the Montréal area," explained Bertrand Recher, Senior Market Analyst.

In 2010, with the better economic environment, single-detached home starts will rise by 6 per cent, while new multi-family housing units will fall by 3.8 per cent.

In the retirement home segment, construction should slow down in 2010, as this market is facing a drop in demand following years of intense activity.

Rental market to stay tight

The rental market should continue to tighten this fall. The vacancy rate in the Montréal CMA will decrease to 2.1 per cent, from 2.4 per cent in the fall of 2008. Rental housing demand will be supported by the increase in the number of immigrants in Montréal. In 2010, even with the high level of immigration, the vacancy rate should rise slightly, to 2.4 per cent, as the difficult employment situation for people aged from 15 to 24 years will have an even greater impact.

Geographic sectors on the rise

The population movement toward the suburbs continues. In fact, the Island of Montréal still presents negative net migration in favour of the suburbs. A shift in the population from the close suburbs (Laval and Longueuil) to more outlying sectors can also be observed. While several factors influence people's choice of a place of residence, the search for affordable properties largely explains this population movement. This is notably the case for condominiums, which now account for nearly 6 out of 10 starts on the Island of Montréal and continue to gain a foothold in the suburbs, particularly on the South Shore.

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 2009)
    -------------------------------------------------------------------------

                                          2004      2005      2006      2007
                                       --------  --------  --------  --------
    Residential Construction
      (Starts)

      Single Detached (1)               28,871    23,930    21,917    22,177
                                                   -17.1      -8.4       1.2

      Multi-Family (2)                  29,577    26,980    25,960    26,376
                                                    -8.8      -3.8       1.6

      Total                             58,448    50,910    47,877    48,553
                                                   -12.9      -6.0       1.4
    Resale Market

      MLS(R) Sales (3)                  70,669    72,670    74,192    83,847
                                                     2.8       2.1      13.0

      MLS(R) Average Price ($)         167,546   180,529   190,348   202,392
                                                     7.7       5.4       6.3

    Other indicators

      GDP Growth (%)                       2.7       1.5       1.7       2.6

      Employment Growth (%)                1.4       1.0       1.3       2.3

      Total Net Migration (4)           36,189    29,035    28,118    32,698
                                                   -19.8      -3.2      16.3
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

                                                    2008    2009(f)   2010(f)
                                                 --------  --------  --------
    Residential Construction
      (Starts)

      Single Detached (1)                         19,778    17,000    18,200
                                                   -10.8     -14.0       7.1

      Multi-Family (2)                            28,123    26,300    24,800
                                                     6.6      -6.5      -5.7

      Total                                       47,901    43,300    43,000
                                                    -1.3      -9.6      -0.7
    Resale Market

      MLS(R) Sales (3)                            79,402    78,250    78,250
                                                    -5.3      -1.5       0.0

      MLS(R) Average Price ($)                   210,775   218,500   223,750
                                                     4.1       3.7       2.4

    Other indicators

      GDP Growth (%)                                 1.0      -2.0       2.1

      Employment Growth (%)                          0.8      -0.7       0.7

      Total Net Migration (4)                     39,158    43,000    44,500
                                                    19.8       9.8       3.5
    -------------------------------------------------------------------------
    Notes:   (1) Dwelling for wich all walls are detached
             (2) Semi-detached, row or apartment units
             (3) Multiple Listing Service (MLS(R))
             (4) Sum of net international migration, net interprovincial
                 migration and net non-permanent residents
    Sources: Canadian Real Estate Association, Statistics Canada, CMHC; (f)
             CMHC forecasts
    -------------------------------------------------------------------------

    Note: 2010 housing starts forecast range : 34,150 to 49,950 units.


    -------------------------------------------------------------------------
                         Forecast Summary - Fall 2009
    -------------------------------------------------------------------------
                                  Single-
                                      de-
                          Total   tached             MLS(R)  Rental
    Major               housing  housing    MLS(R) average  vacancy  Average
    Centres     Year     starts   starts    sales    price     rate     rent
    -------------------------------------------------------------------------
    Gatineau    2008      3,304    1,120    4,390  187,039      1.9      677
                -------------------------------------------------------------
                2009(F)   3,000      950    4,400  194,550      2.1      690
                -------------------------------------------------------------
                2010(F)   3,000      900    4,400  199,400      2.4      705
    -------------------------------------------------------------------------
    Montréal    2008     21,927    6,602   40,441  259,033      2.4      659
                -------------------------------------------------------------
                2009(F)  18,300    5,100   40,100  271,000      2.1      668
                -------------------------------------------------------------
                2010(F)  18,100    5,400   40,500  279,000      2.4      675
    -------------------------------------------------------------------------
    Québec      2008      5,457    2,031    7,838  196,839      0.6      653
                -------------------------------------------------------------
                2009(F)   5,025    1,725    7,450  210,000      0.6      663
                -------------------------------------------------------------
                2010(F)   5,000    1,600    7,700  218,000      0.8      673
    -------------------------------------------------------------------------
    Saguenay    2008        869      400    1,557  139,043      1.6      518
                -------------------------------------------------------------
                2009(F)     515      315    1,450  144,000      1.8      525
                -------------------------------------------------------------
                2010(F)     800      290    1,525  150,000      1.8      530
    -------------------------------------------------------------------------
    Sherbrooke  2008      1,627      802    1,864  179,434      2.8      543
                -------------------------------------------------------------
                2009(F)   1,565      700    1,870  186,600      3.0      555
                -------------------------------------------------------------
                2010(F)   1,345      720    1,950  194,000      3.1      565
    -------------------------------------------------------------------------
    Trois-      2008      1,148      373    1,061  132,987      1.7      505
     Rivières   -------------------------------------------------------------
                2009(F)     900      350    1,030  137,000      1.8      520
                -------------------------------------------------------------
                2010(F)   1,200      320    1,080  140,000      2.0      530
    -------------------------------------------------------------------------
    Quebec      2008     47,901   19,778   79,402  210,775      s.o.     s.o.
                -------------------------------------------------------------
                2009(F)  43,300   17,000   78,250  218,500      s.o.     s.o.
                -------------------------------------------------------------
                2010(F)  43,000   18,200   78,250  223,750      s.o.     s.o.
    -------------------------------------------------------------------------
    n/a: Not applicable
    MLS(R) is a registered trademark of the Canadian Real Estate
    Association (CREA).
    Sources: CMHC, Canadian Real Estate Association, Statistics Canada, CMHC
    Forecast 2009-2010

    Source for Quebec CMA's MLS(R) data: The Quebec Federation of Real Estate
    Boards by Centris(TM), CMHC compilation
    NOTE: Rental universe = Privately initiated rental apartment structures
    of three units and over

Contact Information

  • Catherine Léger, Communications, (514) 475-5165