CMHC Housing Outlook Conference

QUÉBEC CITY, QUÉBEC--(Marketwired - Nov. 24, 2015) - Canada Mortgage and Housing Corporation (CMHC) presented its annual Housing Outlook Conference for the province of Quebec and the Québec census metropolitan area (CMA) today to over 400 industry professionals. Under the theme "Beacons to guide you," the speakers addressed the state of the real estate market across the province and in the Québec CMA and also provided an overview of what will shape tomorrow's market.

Provincial Outlook

The gradual acceleration in Quebec's economic growth will slightly stimulate housing demand in 2016 and 2017. "While the resale market will tighten slightly, the aging of the population will give a boost to residential construction, especially in the multi-unit housing segment," said Kevin Hughes, CMHC's Senior Economist for Quebec.

The outlook for the Canadian housing sector, which suggests activity will remain stable overall, is subject to some national and global risks.

Future oil price developments remain the most significant risk for Canadian economic growth by resulting in significant losses in corporate income and tax revenue. Household debt levels remain high and will continue to be an important risk and vulnerability factor.

Another risk factor for the outlook has to do with overvaluation. The Montréal and Québec CMAs currently show significant signs of overvaluation. "This especially reflects the dampening effect of economic and demographic factors that do not fully support the prices observed," added Hughes.

Regional Outlook: Québec CMA

The new home market is bound to slow down over the coming years in the Québec census metropolitan area (CMA). "The slowdown will be mainly explained by the increase in the supply of existing properties for sale, the still relatively significant inventory of new unsold condominiums and the rise in the vacancy rate in the conventional rental housing market," said Élisabeth Koulouris, CMHC's Principal, Market Analysis, for the Québec CMA.

"On the existing home market, with the low interest rates and the wider choice of homes for sale, Centris^® transactions will rise by 4 per cent in 2016 and 3 per cent in 2017," she added. Also, market conditions will favour buyers and will result in small gains in the average price of residential properties: 1 per cent in 2016 and 1.5 per cent in 2017.

On the rental market, the significant growth in supply, along with a slowing demand, will cause the market to ease from now until 2017. The vacancy rate will therefore climb from 3.9 per cent in 2015¹ to 4.5 per cent in 2016 and then to 5.0 per cent in 2017.

Finally, in addition to the regional outlook from now to 2017, the presentation analyzed rental demand in the longer term in order to highlight the upcoming trends on this key market.

Québec Insights: Market Mapping - Québec CMA

On the new home market, single-family home construction should slow down on the South Shore and in the Northern Suburbs. "We expect condominium starts to decrease, especially in the Sainte- Foy-Sillery, Saint-Augustin-Cap-Rouge and Haute-Ville sectors," said Marie-Claude Guillotte, Senior Market Analyst at CMHC.

On the resale market, well-located and more affordable sectors, such as Les Rivières and Charlesbourg, will continue to attract buyers of single-family homes and condominiums.

The Sainte-Foy-Sillery and South Shore East rental markets will potentially be marked by strong construction activity in the upcoming years. "In these sectors the additional supply could result in a greater rise in the vacancy rate than the average increase posted in the CMA," added Guillotte.

Finally, the number of spaces available in seniors' residences will rise on the South Shore and in Sainte-Foy-Sillery over the next three years.

As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

Follow CMHC on Twitter @CMHC_ca.

¹ Preliminary data