Greater Montréal is set to go through important demographic changes. These changes will influence the dynamics of the Montréal real estate market. Residential construction could slow down, and population aging should provide some support for rental housing demand and resale market listings.
CMHC Senior Economist Francis Cortellino presented the newest Housing Market Insight to a well-attended Les Affaires conference in Montréal. The gathering of housing industry professionals provided a platform for exploring ways to create stable, affordable communities in the coming years.
Here’s a closer look at the highlights of the Housing Market Insight:
New home market: slowdown on the horizon
Net household formation in Montréal will decrease over the next 20 years. This hints at an overall slowdown in residential construction over the same period, both on the Island of Montréal and in the suburbs.
However, population aging should encourage more starts of apartments (both rental apartments and those with condominium title).
Rental market: demand driven by older households
On the rental market, demand should accelerate over the coming years, and will be driven, in part, by older households. If this does indeed occur, it should facilitate the absorption of the large number of new rental units currently under construction.
Resale market: population aging will support listings
On the resale market, population aging will help increase the number of properties listed for sale in the future. In the short term, however, this number will likely be limited. It could, therefore, take a number of years before the effects of population aging are felt more concretely.
Household behaviour a key factor in shaping future housing market
The real question is whether households will behave similarly to their predecessors in the future. Whether they do or not, their behaviour will play an important role in shaping the Montréal housing market in the years to come.