Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

May 18, 2016 08:15 ET

Housing Market Outlook for 2016 and 2017 Montréal CMA

MONTRÉAL, QUÉBEC--(Marketwired - May 18, 2016) - According to the second quarter 2016 issue of the Housing Market Outlook report released by Canada Mortgage and Housing Corporation (CMHC), housing starts in the Montréal census metropolitan area (CMA) will range between 16,000 and 18,000 units in 2016 and between 15,200 and 18,200 in 2017. Centris® sales, for their part, will be between 38,500 and 40,500 units this year and between 39,000 and 42,000 next year.

After staying at around 18,700 units in 2015, housing starts will register a small decrease this year and should range between 16,000 and 18,000 units. As was the case last year, rental housing starts will remain at a significant level this year. "With the condominium market running out of steam, some builders started to look for other opportunities, and the low vacancy rates for newer rental buildings seem to indicate a certain demand for modern units. The construction of seniors' housing should also stay strong in 2016," said Geneviève Lapointe, Principal, Market Analysis, at CMHC. In the condominium segment, the number of unsold new and existing units on the market will remain at a relatively high level, such that the need for new units will still be limited in 2016.

In 2017, housing starts should range between 15,200 and 18,200 units. The drop in the minimum number of starts expected (15,200 in 2017, versus 16,000 in 2016) essentially reflects the likelihood that fewer rental apartments and condominium units will get under way in greater Montréal.

As for Centris® sales, they will range between 38,500 and 40,500 units in 2016 (compared to 37,900 in 2015). This increase in demand will be attributable in part to the employment growth in the CMA and the low mortgage rates, which are not expected to rise from now until the end of the year. "With demand on the rise and supply on the decline, market conditions will tighten. The tighter conditions will be such that the overall average price will post gains ranging between 1.7 per cent and 3.2 per cent and reach a level between $343,000 and $348,000," added Lapointe.

In 2017, the increase in sales will continue to help lower the supply, and market conditions will keep getting tighter. However, the condominium market should still be favourable to buyers. For single-family homes and plexes, market conditions will be tending to increasingly favour sellers in certain sectors of the CMA.

Lastly, on the rental market, as supply will outpace demand over the forecast horizon, the vacancy rate will remain high, reaching 4.3 per cent in 2016 and 4.7 per cent in 2017.

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.

For more information, visit our website at www.cmhc.ca or follow us on Twitter, YouTube, LinkedIn and Facebook.

Additional data is available upon request.

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