Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

November 16, 2011 12:00 ET

CMHC Housing Outlook Conference

QUEBEC CITY, QUEBEC--(Marketwire - Nov. 16, 2011) - Canada Mortgage and Housing Corporation (CMHC) presented its annual Housing Outlook Conference today to nearly 500 industry professionals. Under the theme "A Broader Vision," the speakers talked about the real estate market the country, across the province and in the Québec census metropolitan area (CMA). They explained how the housing market in the area will evolve over the coming year.

Across the country

Canadian housing starts are forecast to stabilize into 2012. "Despite continued uncertainty in the global economy, Canada's economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration. These factors will continue to support Canada's housing sector in 2012," said Mathieu Laberge, Deputy Chief Economist at CMHC.

Housing starts will be in the range of 161,650 to 206,350 units in 2011, with a point forecast of 186,750 units. The resale market is expected to remain in balanced conditions next year. In 2012, MLS® sales are expected to move up modestly and be in the range of 406,100 to 509,000 units, with a point forecast of 458,500 units. The increase in the average MLS® price is expected to be consistent with the balanced market conditions that have prevailed so far in 2011, and that are expected next year.

Across the province

Given the current moderation and uncertainty, economic growth in Quebec is not expected to surpass the 2-per-cent mark in 2012. As for employment, relatively stable growth is anticipated for next year (+1.4 per cent).

"The economic environment, while moderate, will nevertheless support housing demand next year. As well, the demographic trends will continue to have an impact on the market, especially on the demand for apartments—rental and condominium," said Kevin Hughes, Regional Economist at CMHC for the province of Quebec.

After declining for a year, resale market activity will gradually pick up again thanks to the economic environment and an increase in the housing stock. While demand was declining, increased supply has lead to an easing on the resale market. This is the case in each market segment; however, among the regions, market conditions vary. In this context, prices will register smaller increases.

As for residential construction, the easing of the resale market is reducing demand for new homes this year. After declining in 2011, single-detached home starts will rebound slightly next year. Following two years of sustained construction, a notable decrease in multiple-unit housing starts is anticipated for 2012.

Québec CMA

This year and next year, the Québec CMA housing market will continue to enjoy favourable conditions: a vibrant job market, combined with strong net migration and still attractive financing conditions, will fuel housing demand. As well, while the pace is expected to slow, the market will definitely remain vigorous.

Following an exceptional year in 2010, residential construction will slow down, as starts will reach 5,400 units in 2011 (-19 per cent) and 4,900, in 2012 (-9 per cent). After a pause in 2010, the downward trend in single-detached home building will once again be felt. Semi-detached and row homes, for their part, will remain popular, as in previous years, but starts are expected to register a small decrease in 2011 and then remain stable in 2012. Condominiums are enjoying unprecedented popularity in the CMA, as construction of this type reached a peak in 2010, with 1,727 starts. This strong activity will hold up in 2011, before registering a decrease in 2012, which will reflect an adjustment of supply in relation to demand. Lastly, rental housing construction will weaken in 2011 and then stabilize in 2012.

For 2011, the resale market will gradually regain strength and reflect a slight increase in activity (+2 per cent) over 2010, and there should be a total of 7,200 MLS® transactions. In 2012, MLS® sales will rise again (+4 per cent), to 7,500 units. As well, buyers will enjoy a greater choice of properties for sale, which will make it easier for them to find and purchase a home. This easing of the market will moderate the price increases, and the average MLS® price of residential properties will reach $252,000 in 2011 (+6 per cent) and $262,000 in 2012 (+4 per cent).

Finally, the rental market will be easing, on account of the recent construction of many rental housing units. While the demand for such dwellings will remain steady, construction will continue, which will allow market conditions to ease. As a result, the vacancy rate will rise from 1.0 per cent in 2010 to 1.4 per cent in 2011 and then to 1.8 per cent in 2012.

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 homes—homes that will continue to create vibrant and healthy communities and cities across the country.

Contact Information

  • Catherine Leger
    Communications
    514-475-5165