Quebec Housing starts to remain at high level in 2008



    MONTREAL, Aug. 15 /CNW Telbec/ - According to the latest forecasts
conducted by Canada Mortgage and Housing Corporation (CMHC), total housing
starts in Quebec will reach 46,600 units in 2008 and over 45,750 in 2009.
    "Despite a recent weakening of home buying conditions, the economic and
demographic growth of the past year will help sustain Quebec housing demand at
relatively high levels this year and next. As the province's economy grows
thanks to domestic spending and investment, recent job growth and disposable
income increases will continue to fuel demand. While the strong Canadian
dollar has stimulated private investment, government infrastructure projects
and tax cuts will be a key source of economic growth in the near term" stated
Bertrand Recher, Senior Economist at CMHC.
    "The outlook for the province's export sector remains weak as the current
exchange rate, growing foreign competition and decreased foreign demand (this
will be especially true of the manufacturing sector) continue to erode GDP
growth. We thus expect the Quebec economy to grow by 0.9 per cent this year
and under two per cent in 2009, while job growth registers approximately one
per cent," added Bertrand Recher.
    "As the province's economy continues to grow and the provincial
government increases its immigration targets, net migration will strengthen in
the coming years. Moreover, population aging will continue to fuel demand.
This and the relatively low level of mortgage rates shall translate into
46,500 starts in 2008 and over 45,000 the following year," concluded Recher.

    Mortgage rates

    Both short and long-term interest rates are expected to remain within
25-50 basis points of their current levels in Canada and the U.S. for the rest
of this year, then edge higher in 2009. Canadian mortgage rates are expected
to remain within 25-75 basis points of their current level this year and next.
One and five-year mortgage rates are forecast to be in the 6.50-7.25 and
6.75-7.50 per cent range respectively in 2008 and 2009.

    Markets

    Single Starts : Although single-family starts will benefit from the
current economic and financial environment, demand for such homes will be
weakened by the recently rising supply of resale homes. Moreover, potential
demand should gradually shift toward less expensive substitutes such as
semi-detached, row and even apartment (condominium) housing. Approximately
20,000 starts are expected in both 2008 and 2009.

    Multiple Starts : The multi-family home market will benefit from the
current environment. Still, after a year of vigorous construction of
retirement homes in 2007, starts of multi-family homes will cool to 27,500
units in 2008 and over 26,000 the following year.

    Resales : Sales of existing homes should decline in 2008 but will remain
strong in the coming years. Demand for condominiums (town houses or
apartments) shall be an important component. Sales of existing homes on the
Multiple Listing Service (MLS) should record just under 76,000 in 2007 and
around 77,000 2008.

    Prices : As sales cool and as inventories rise, price growth will not be
as strong in the coming years. Cooling demand should keep price growth under
the 5 per cent mark in 2008 and 2009. As a result, the MLS average resale
price will approach $ 218,000 in 2008 and $ 224,000 in 2009.

    Canada Mortgage and Housing Corporation (CMHC) has been Canada's national
housing agency for more than 60 years. CMHC is committed to helping Canadians
access a wide choice of quality, affordable homes, while making vibrant,
healthy communities and cities a reality across the country. For more
information, visit www.cmhc.ca or call 1-800-668-2642.

    
    -------------------------------------------------------------------------
    CMHC Housing Market Forecasts: Province of Québec (August 2008)
    -------------------------------------------------------------------------
                         2004      2005     2006     2007   2008(f)  2009(f)
                         ----      ----     ----     ----   ------   ------
    Residential
     Construction
     (Starts)
      Single
       Detached(1)     28,871    23,930   21,917   22,177   19,113   19,750
      Multi-Family(2)  29,577    26,980   25,960   26,376   27,500   26,000
      Total            58,448    50,910   47,877   48,553   46,613   45,750

    Resale Market
      MLS(R) Sales(3)  69,296    70,649   72,520   80,338   75,900   77,200
      MLS(R)
       Average
       Price ($)      171,099   184,583  194,024  208,240  218,086  224,000

    Other indicators
      GDP Growth (%)      2.6       2.0      1.7      2.4      0.9      1.9
      Employment
       Growth (%)         1.4       1.0      1.3      2.3      0.9      0.9
      Total Net
       Migration(4)    34,443    27,506   24,580   28,380   35,500   37,500

    -------------------------------------------------------------------------
    Notes: (1) Dwelling for which all walls are detached
           (2) Semi-detached, row or apartment units
           (3) Multiple Listing Service (MLS(R))
           (4) Sum of net international migration, net interprovincial
               migration and net non-permanent residents
    Sources:   Canadian Real Estate Association, Statistics Canada, CMHC;
           (f) CMHC forecasts
    -------------------------------------------------------------------------
    




For further information:

For further information: Province: Bertrand Recher, Senior Economist,
(613) 748-4811; Montréal: Astrid Joseph, Market Analyst, (514) 496-8564;
Québec, Trois-Rivières, Saguenay: Frédéric Brie, Market Analyst, (418)
649-8102; Sherbrooke, Gatineau: Francis Cortellino, Market Analyst, (514)
283-8391


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