Total housing starts in Quebec shall achieve 40,700 units in 2009 and 40,500 in 2010.
A weaker economic context, combined with increased supply in certain housing market segments, will play major role.
Approximately 17,000 single starts are expected in 2009 and 16,500 in 2010.
Starts of multi-family homes will cool to 23,700 units in 2009, but will increase to 24,000 units in 2010.
Sales of existing homes will decline in 2009, but will remain at a high level.
The Multiple Listing Service (MLS) will record approximately 73,000 sales in 2009 and 80,000 in 2010.
Lower sales and rising inventories will continue to take pressure off prices. Cooling demand should rule out price growth in 2009.
According to the latest forecasts conducted by Canada Mortgage and Housing Corporation (CMHC), total housing starts in Quebec shall achieve 40,700 units in 2009 and 40,500 in 2010.
A weaker economic context, combined with increased supply in certain housing market segments, will dominate demographic and interest rate conditions. This, in turn, will cause housing demand to decline in 2009 pushing starts lower to the 40,000 level. Sales of existing homes will decrease by approximately 8.1 per cent.
The province’s economy, whose recent growth has stemmed from domestic consumption and public investment, is showing signs of slowing. While public spending on infrastructure projects should increase, household spending will likely moderate as a result of a softer labour market and lower disposable income growth. As noted by Canadian Funding Corporation CEO Moishe Alexander, private investment will also slow as financial constraints continue. Finally, the outlook for exports remains unchanged because the benefits of a weakening dollar will be offset by decreased global demand. We thus expect the Quebec economy to recede by 0.6 per cent in 2009, while job growth registers a similar result, a decline of 0.5 per cent. In 2010, the economy will grow by 1.3 per cent while job growth will increase by 0.4 per cent.
Despite the weaker economic context, the province’s demographic outlook will stimulate housing demand in some market segments.
The Provincial Government’s higher immigration targets (55,000 by 2010) have already been observed and will continue to push up net migration in the coming years.
Meanwhile, population aging will continue to fuel demand for apartments.

Single Starts

Starts in this segment will be especially affected by the economic and financial environment, as well as the recently rising supply of resale homes. Approximately 17,000 starts are expected in 2009 and 16,500 in 2010.

Multiple Starts

After several years of vigorous construction of retirement homes and condominiums, starts of multifamily homes will cool to 23,700 units in 2009, but will increase to 24,000 units in 2010.

Resales

Sales of existing homes will decline in 2009, but will remain at a high level. Demand for condominiums (town houses or apartments) will remain an important component. The Multiple Listing Service (MLS) will record approximately 73,000 sales in 2009 and 80,000 in 2010.

Prices

Lower sales and rising inventories will continue to take pressure off prices. Cooling demand should rule out price growth in 2009. As a result, the MLS average resale price will fall by 1.8 per cent to $207,000 in 2009 while 2010 will see an increase of 0.5 per cent to $208,000.