Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

May 19, 2009 23:59 ET

Quebec housing starts to achieve 40,000 in 2009

MONTREAL, May 19 - According to the latest forecasts
conducted by Canada Mortgage and Housing Corporation (CMHC), total housing
starts in Quebec shall achieve 40,000 units in 2009 and over 41,000 in 2010.
A weaker economic environment, combined with increased supply of homes in
certain market segments, has set the stage for declining housing starts in
Quebec this year. "Despite favourable buying conditions, housing starts will
move down to the 40,000 level in 2009, while sales of existing homes decrease
to about 70,000 units" said Kevin Hughes, Senior Economist at CMHC for Quebec.
The province's economy, whose growth went from 2.6 per cent in 2007 to
1.0 per cent last year, started to show signs of contraction in the last
quarter of 2008. It is expected that the currently high level of economic
uncertainty and the declining labour market will continue to hold back
household spending in the near term. And while private investment is reduced,
the outlook for exports continues to worsen as external (foreign and Canadian)
demand weakens.
However, governments have responded through increased spending on
infrastructure projects and by enacting fiscal and monetary stimulus plans.
Still, the Quebec economy will recede by 2 per cent in 2009, while job growth
registers a similar result, a decline of 1.9 per cent. In 2010, the economy
will grow by 1.4 per cent while the labour market begins to recover (0.1 per
cent). "Meanwhile, demographic patterns will fuel housing markets in Quebec.
Sustained and increasing net migration will stimulate demand for rental
housing while population aging will draw retirees into apartment living. These
trends will continue, however their rate of increase is expected to slow in
the short term" added Kevin Hughes.

In Detail

Single Starts: Starts in this segment will be especially affected by the
economic and financial environment. Homebuyers will increasingly turn to the
less expensive resale market, where supply is more abundant. Semi-detached and
row housing are also likely to be viewed as more affordable substitutes.
Approximately 16,600 single starts are expected in 2009 and close to 18,000 in
2010.
Multiple Starts: Quebec markets have posted several years of vigorous
construction of retirement homes and condominiums, bringing multifamily starts
to historically high levels. Given the fact the growth rate of the population
aged 75 and over will temporarily slow and given current elevated supply,
starts in this category will drop to 23,400 units in 2009, increasing
marginally in 2010.
Resales: Sales of existing homes will decline in 2009, but will remain at
a relatively high level. Demand for condominiums (town houses or apartments)
will still be an important component, but will nevertheless decrease. The
Multiple Listing Service (MLS) will record approximately 70,000 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 rising inventories will continue to take pressure
off prices. Cooling demand should rule out price growth in 2009. As a result,
the MLS average resale price will fall to about $207,000 in 2009. Even though
price growth resumes in the latter part of 2010, no significant increase is
expected for the year as a whole.

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 - Spring 2009
-------------------------------------------------------------------------
Single
deta- Rental
Total ched MLS® vacan-
Major housing housing MLS® average cy Average
Centres Year starts starts sales price rate rent
-------------------------------------------------------------------------
2008 3,304 1,120 4,390 186,212 1.9 677
------------------------------------------------------------
Gatineau 2009(F) 2,700 850 3,975 189,000 2.5 690
------------------------------------------------------------
2010(F) 2,750 800 3,875 190,900 2.5 705
-------------------------------------------------------------------------
2008 21,927 6,602 40,440 258,028 2.4 659
------------------------------------------------------------
Montréal 2009(F) 17,700 5,200 36,500 255,000 2.0 668
------------------------------------------------------------
2010(F) 18,900 5,500 39,500 256,000 2.3 675
-------------------------------------------------------------------------
2008 5,457 2,031 8,003 193,195 0.6 653
------------------------------------------------------------
Québec 2009(F) 4,795 1,725 7,445 198,991 0.6 663
------------------------------------------------------------
2010(F) 4,330 1,465 7,820 204,961 0.6 673
-------------------------------------------------------------------------
2008 869 400 1,557 150,597 1.6 518
------------------------------------------------------------
Saguenay 2009(F) 645 295 1,250 156,600 2.0 530
------------------------------------------------------------
2010(F) 565 300 1,350 163,600 2.0 540
-------------------------------------------------------------------------
2008 1,627 802 1,864 179,434 2.8 543
------------------------------------------------------------
Sherbrooke 2009(F) 1,545 730 1,800 179,400 3.0 555
------------------------------------------------------------
2010(F) 1,450 750 1,890 179,500 3.1 565
-------------------------------------------------------------------------
2008 1,148 373 799 141,610 1.7 505
Trois- ------------------------------------------------------------
Rivières 2009(F) 850 325 760 146,000 1.8 515
------------------------------------------------------------
2010(F) 800 310 750 150,000 2.0 525
-------------------------------------------------------------------------
2008 47,901 19,778 79,402 210,775 n/a n/a
------------------------------------------------------------
Quebec 2009(F) 40,000 16,600 70,000 207,200 n/a n/a
------------------------------------------------------------
2010(F) 41,350 17,850 77,000 207,500 n/a n/a
-------------------------------------------------------------------------
n/a: Not applicable

MLS® 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® data: The Quebec Federation of Real Estate
Boards by Centris™, CMHC compilation

NOTE: Rental universe = Privately initiated rental apartment
structures of three units and over

Contact Information

  • For further information: Province: Kevin Hughes, Senior Economist CMHC,
    (514) 283-4488; Montréal: Bertrand Recher, Senior Market Analyst, (514)
    283-2758; 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): Marie-Elaine Denis, Market Analyst, (418) 649-8100;
    Saguenay: Patrice Tardif, Senior Market Analyst, (514) 283-2097