MONTRÉAL, QUÉBEC--(Marketwire - Nov. 20, 2012) - Canada Mortgage and Housing Corporation (CMHC) presented its annual Housing Outlook Conference today to about 1,000 industry professionals. Under the theme "Trends, transitions and new realities," the speakers addressed the state of the real estate market across the province and in the Montréal census metropolitan area (CMA) and also provided an overview of what will shape tomorrow's market. A special presentation on the condominium market-a hot topic-closed the program.
Special Condominium Study
Over the past year, CMHC conducted a special study on the condominium market. The results of this study show that there has been very little quick resale activity on this market in the Montréal CMA over the past few years. In addition, the percentage of investors on the Montréal area condominium market is relatively limited. The study also revealed that condominiums change hands much more often than single-family houses.
For Quebec overall, the fundamentals, while in moderation, will support the housing market in 2013. The economic slowdown and the easing of the resale market will reduce demand for new homes this year and next year. Single-detached home starts will be down by 4 per cent this year and by 6 per cent next year. Some 15,000 new dwellings are expected in 2013. Multiple-unit housing starts should decline by 3.2 per cent in 2012 and then by 11.4 per cent in 2013, to 27,300 units. In 2013, MLS® sales should post an increase similar to this year's gain of 1.4 per cent and reach 79,800 units. With a return to more balanced conditions, the growth in prices on the resale market will continue to moderate in 2012 and 2013 (with increases of 3.9 per cent in 2012 and 0.8 per cent in 2013), and the average price should attain $271,800 this year and $274,100 next year. Given the current moderation and uncertainty abroad, economic growth in Quebec is expected to remain below the 2-per-cent mark in 2013. As for employment, relatively stable growth is anticipated for next year (+1.5 per cent).
Regional Outlook - Montréal CMA
In the Montréal CMA, housing demand will be supported by higher net migration, still low mortgage rates and employment growth, which will however be modest in 2012 and 2013.
On the resale market, transactions will register small gains of 0.8 per cent in 2012 and 2.0 per cent in 2013. The supply of existing homes will outpace demand, which will lead to increasingly softer market conditions. As a result, in the overall CMA, the growth in prices will slow down in 2012 and 2013, as potential buyers will see their choice widen on the market (prices should rise by 4.0 per cent in 2012 and then by 2.0 per cent in 2013).
After two years of increase, activity on the new home market will slow down in 2012 and 2013. The decline will result from a weaker housing demand and softer conditions on the resale market, especially in the condominium segment. In 2013, the rise in inventories of unoccupied condominiums will cause builders to further reduce the pace of construction. Condominiums will continue to account for more than half of the housing starts, but the drop in this segment will be primarily responsible for the overall decline in activity on the new home market. Housing starts in the Montréal CMA will fall by 12 per cent in 2012 and then by 6 per cent in 2013.
The rental housing vacancy rate, which stood at 2.5 per cent in 2011, will decrease slightly and attain 2.3 per cent in the fall 2012. Demand for rental housing continues to be supported by the many newcomers arriving in the CMA, making up for the renters who are moving to homeownership. The vacancy rate will follow a slight downward trend and reach 2.0 per cent in 2013.
Tour of the Neighbourhoods - Montréal CMA
In the various sectors of the metropolitan area, some housing densification is to be expected over the coming years, following the adoption of the metropolitan land use and development plan.
In the single-family home segment, conditions on the resale market have remained generally stable in relation to last year. Freehold home construction continues to be concentrated mainly in the suburbs.
As for condominiums, the resale market started to ease significantly on the Island of Montréal, where conditions went from favouring sellers in the third quarter of 2011 to being balanced in the third quarter of 2012, in most sectors. As well, on the new home market, the borough of Ville-Marie stands out, with the most condominium starts on the Island.
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.