Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

September 03, 2009 23:59 ET

Quebec housing starts forecasts

MONTREAL, Sept. 3 - According to the latest forecasts conducted by Canada Mortgage and Housing Corporation (CMHC), a weaker economic environment, combined with increased supply of homes will lower housing construction in Quebec this year. Despite favorable buying conditions, housing starts will descend to the 43,000 level in 2009, while sales of existing homes will decline to about 75,000 units. The province's economy and housing sector will begin to recover in 2010.

Quebec's economy, whose growth went from 2.6 per cent in 2007 to 1.0 per cent last year, has contracted in the fourth quarter of 2008 and in the first quarter of 2009. Recent losses in the labour market combined with the currently high level of economic uncertainty will continue to hold back household spending in the near term. This, in turn, will reduce private investment. Moreover, exports will remain weak in 2009 as external (foreign and Canadian) demand weakens.

Governments have responded with increased spending on infrastructure projects and recent fiscal and monetary stimulus plans. As a result, the Quebec economy is expected to recede by 2 per cent in 2009, while job growth will register a decline of 1.1 per cent. In 2010, the economy will grow by 1.4 per cent while the labour market begins to recover (0.4 per cent).

In Detail

Single Starts: This segment will be affected by the economic and financial environment, as well as by the recently rising supply of resale homes. Affordability has become more of an issue, prompting homebuyers to turn to the resale market, where supply is more abundant. As well, semi-detached and row housing are likely to be viewed as substitutes for single-detached houses. Approximately 17,600 single starts are expected in 2009 and just under 18,000 are expected in 2010.

Multiple Starts: In recent years, vigorous construction of retirement homes and condominiums brought multi-family starts to historically high levels in Quebec markets. Given the fact the growth rate of the population aged 75 and over will temporarily slow and given current supply, starts in this category will slow to approximately 25,500 units in 2009 and just over 23,000 in 2010.

Resales: Sales of existing homes will decline in 2009, but will remain at a relatively high level. Demand for condominiums will still be an important component, but will nevertheless decrease. The Multiple Listing Service (MLS(R)) will record over 75,000 sales in 2009. Being the first market to react to the economic recovery, resales will amount to 77,000 in 2010.

Prices: Lower sales and higher inventories will begin to take pressure off prices. Cooling demand should cool price growth in the final months of 2009 and early 2010. As a result, the average MLS(R) price will post growth of 1.4 per cent to $213,700 in 2009. Market conditions will improve slightly in 2010, translating into marginal price growth, as the average MLS(R) price surpasses the $215,000 level.

Canada Mortgage and Housing Corporation (CMHC) has been Canada's national housing agency for more than 60 years. CMHC is committed to helping Canadians access a wide choice of quality, affordable homes, while making vibrant, healthy communities and cities a reality across the country. For more information, visit www.cmhc.ca or call 1-800-668-2642.


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                  Forecast Summary - September 2009

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                              Single-

                      Total detached              MLS(R) Rental

Major               housing  housing   MLS(R)   average vacancy  Average

Centres     Year     starts   starts   sales      price    rate     rent

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            2008      3,304    1,120   4,390    186,212     1.9      677

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Gatineau    2009(F)   2,910      960   4,025    192,800     2.3      690

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            2010(F)   2,850      850   3,925    197,500     2.5      705

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            2008     21,927    6,602  40,440    258,028     2.4      659

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Montréal    2009(F)  17,900    4,800  37,400    263,000     2,1      668

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            2010(F)  18,900    5,400  39,000    263,700     2,4      675

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            2008      5,457    2,031   8,003    193,195     0.6      653

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Québec      2009(F)   4,800    1,725   7,450    202,850     0.6      663

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            2010(F)   4,300    1,450   7,800    208,950     0.8      673

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            2008        869      400   1,557    150,597     1.6      518

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Saguenay    2009(F)     525      275   1,400    158,000     2.0      530

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            2010(F)     850      300   1,400    165,000     2.0      540

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            2008      1,627      802   1,864    179,434     2.8      543

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Sherbrooke  2009(F)   1,550      730   1,790    183,000     3.0      555

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            2010(F)   1,525      750   1,880    186,600     3.1      565

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            2008      1,148      373     799    141,610     1.7      505

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Trois-      2009(F)     850      325     765    144,500     1.8      515

Rivières   --------------------------------------------------------------

            2010(F)     810      300     750    148,800     2.0      525

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            2008     47,901   19,778  79,402    210,775     n/a      n/a

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Quebec      2009(F)  43,175   17,250  75,400    213,700     n/a      n/a

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            2010(F)  41,100   17,500  77,000    215,100     n/a      n/a

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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

  • Province: Catherine Léger, Communications,
    (514) 283-7972; Montréal: Astrid Joseph, Market Analyst, (514) 496-8564;
    Québec: Elisabeth Koulouris, Senior Market Analyst, (418) 649-8098; Gatineau
    (Outaouais): Patrice tardif, Senior Market Analyst, (514) 283-2097; Sherbrooke
    (Estrie): Francis Cortellino, Market Analyst, (514) 283-8391; Trois-Rivières
    (Mauricie): Elisabeth Koulouris, Senior Market Analyst, (418) 649-8098;
    Saguenay: Patrice Tardif, Senior Market Analyst, (514) 283-2097