Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

November 27, 2012 12:00 ET

CMHC Housing Outlook Conference

QUÉBEC CITY, QUÉBEC--(Marketwire - Nov. 27, 2012) - Canada Mortgage and Housing Corporation (CMHC) presented its annual Housing Outlook Conference today to about 500 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 Québec 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.

All About Condominiums

In recent years, condominium activity has been booming in several markets across Canada, and the Québec CMA is no exception. While several factors account for the growing popularity of this type of housing, the dynamics on the market have a few grey areas, such as the scope and specific features of the demand, the possible presence of an "investor" market, and the state of the relationship between supply and demand.

An analysis of the market data revealed that a certain proportion of condominium buyers may be qualified as "investors," in that these owners do not live in their units on a permanent basis.

The existing condominium market is balanced, and supply has outpaced demand on the new condominium market. As a result, there is every indication that the rate of construction will slow down over the coming quarters, which will allow for a better alignment of supply and demand.

Provincial Outlook

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).

Québec CMA Outlook

In Québec CMA, the economic and demographic environment will remain stable this year and next, which will moderate housing demand from now until the end of 2013.

Still, in 2012, activity will be particularly significant on the new home market, as 6,080 starts are anticipated, for an increase of 12 per cent over the level recorded in 2011. The start of construction on several condominium and rental housing projects will account for this growth. In 2013, however, the declines expected in these two market segments will limit total starts to 5,000 units, representing a drop of 18 per cent for the CMA.

The more moderate trend in economic conditions will restrict potential growth on the resale market. MLS® transactions will therefore rise by 2 per cent, in both 2012 and 2013. Overall, the market will be softer, so there will be more choice for buyers.

The rental market should ease very slightly this year, and the vacancy rate should rise to 1.8 per cent, from 1.6 per cent in 2011. Next year, market conditions should soften more significantly, with the arrival of a number of new rental dwellings, and the proportion of vacant units should reach 2.5 per cent.

Tour of the Neighbourhoods - Québec CMA

This year, the construction boom has benefited the central neighbourhoods. Condominiums and rental housing are at the heart of this strong activity. Single-detached, semi-detached and row home building is on the decline but remains significant in the northern and southern outlying sectors of the CMA.

Residential MLS® sales posted a greater gain in the Northern Suburbs. The Les Rivières and Beauport zones registered significant increases in single-family home sales while, in the case of condominiums, the Beauport and western South Shore zones stood out. At the same time, the supply of condominiums rose considerably, such that market conditions still favoured sellers in only three zones: the western part of the South Shore, Charlesbourg and Les Rivières.The general easing of the market contributed to slowing the growth in prices.

Rental market conditions softened mainly in a few zones, but the vacancy rates stayed relatively tight everywhere.

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.

Contact Information

  • Media Relations
    Catherine Leger
    514-283-7972
    514-475-5165 (cell)
    cleger@cmhc.ca