MONTRÉAL, May 18, 2016 — Quebec housing starts will moderate this year and increase slightly next year, according to the latest Quarterly Housing Market Outlook (HMO) conducted by Canada Mortgage and Housing Corporation (CMHC).
Foreground: Kevin Hughes, Regional Economist (Quebec)
Background: office setting, book shelves, books.
Kevin Hughes: “A gradual acceleration of Quebec’s economic growth will support housing demand in 2016 and 2017. As a result, the province’s resale markets will continue to tighten and prices will remain sustained. Meanwhile, the effects of population aging will provide impetus to residential construction, in particular to the apartment market segment.”
It is unlikely that the moderate employment growth and the tightening of the resale market will have a significant impact on demand for new single-detached homes in the forecast horizon.
Both demand and market share in this market segment will continue their downward trends as demand and supply continue to shift toward apartments.
Starts will be situated within the 9,500 and 9,900 levels in 2016 and within the 9,600 and 10,000 levels next year.
While condominium starts continue to be held back by relatively high levels of supply, renewed activity in the retirement home segment and in the purpose built rental market in some areas of the province will sustain multi-family starts in both 2016 and 2017.
Starts in the multi-family segment will lie within a range of 24,900 to 26,100 units this year. The forecast range for 2017 is similar and includes lower bound of 24,500 starts and upper bound of 26,100 units.
In the next two years, sales of existing houses should be fuelled by employment growth.
In 2016, sales recorded by Centris® should lie within a range of between 75,000 and 80,000 transactions. Next year, the forecast range will move up slightly (76,000 to 82,000 transactions).
Despite relatively high supply levels in certain market segments, the gradual tightening of resale markets will sustain prices during the forecast horizon.
The average resale price will lie within the $278,000 and $285,000 band in 2016 and between the $283,000 and $290,000 marks next year.
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.
“A gradual acceleration of Quebec’s economic growth will provide some stimulus to housing demand in 2016 and 2017. As a result, the province’s resale markets will continue to tighten and prices will remain sustained. Meanwhile, the effects of population aging will provide impetus to residential construction, in particular to the apartment market segment. Meanwhile, the effects of population aging in the province will contribute to residential construction, in particular to the multi-family market segment”
— Kevin Hughes, Regional Economist (Quebec), Canada Mortgage and Housing Corporation