CMHC Housing Outlook Conference

QUÉBEC, Nov. 23 /CNW Telbec/ - Canada Mortgage and Housing Corporation (CMHC) presented its annual Housing Outlook Conference today to some 500 industry professionals. Under the theme "A Changing Market: A 360 degree View," the speakers talked about the real estate market in the Québec census metropolitan area (CMA) and across the province. They explained how this metropolitan area stands out from other CMAs in Quebec and Canada and then provided a detailed analysis of the conditions on the different housing markets and an overview of the major sectors in the area.

Across the province

As a result of improving global and national economic conditions, Quebec's economy, which has been contracting since the end of 2008, will begin to recover in the latter part of this year. Domestic consumption is already showing signs of growth while fiscal and monetary policy will continue to stimulate the economy. CMCH thus expects the Quebec economy to grow by 2.1 per cent in 2010. Nevertheless, firms will be slow to add to their payrolls and the province's labour market will grow at a slower rate. Job growth of less than one per cent is expected in 2010.

According to CMHC, 43,000 starts are expected in the province in 2010. Sales of existing homes will surpass the 78,000 mark next year. "In 2009, a weaker economic environment, combined with increased supply of homes in certain market segments, lowered housing construction in Quebec. In 2010, a recovering economy, still favourable borrowing environment and a tighter resale market will translate into sustained new home construction," said Kevin Hughes, Senior Economist at CMHC.

Québec area

Residential construction to remain steady in 2010

A resilient labour market, steady migration, a continued seller's market for existing homes and a still tight rental market, combined with favourable financing conditions for households, will help maintain housing starts volumes above the 5,000-unit mark in 2009 and 2010.

The good economic conditions that have been prevailing in the Québec area for several years boosted the housing market. Household incomes rose significantly in the area, such that Québec had one of the highest income growth rates among the major Canadian CMAs from 2000 to 2005. Property prices also posted notable growth, averaging at 14 per cent per year, from 2002 to 2008. Still, an analysis of the ratio between shelter costs and average household income indicates that the market remains more affordable in the Québec CMA than in the other major urban centres across Canada.

As well, increased employment opportunities in the Québec CMA supported the migration of households to the area. This maintained pressure on the rental market, which is one of the tightest in Canada, with a vacancy rate that will remain at 0.6 per cent in 2009. These market conditions will stimulate traditional rental housing construction, but the vacancy rate will rise only slightly in 2010, to 0.8 per cent.

Despite a small decline of the resale market in 2009 (-5 per cent), conditions remain favourable to sellers and are supporting the upward trend in prices (+7 per cent). For 2010, it is expected that supply will be more abundant, that transactions will increase and that the growth in prices will be less marked (+4 per cent).

The greater housing demand, combined with the limited supply of lots available for residential construction, contributed to the rise in prices on the new home market. This increase is progressively causing some households to turn to less expensive housing types, such as semi-detached houses and condominiums, which are therefore becoming more and more popular.

It is estimated that one of out five people aged 75 years or older lives in a retirement home. Construction of this type recently experienced a surge, with mostly one-bedroom apartments being built, as demand is stronger for such units. Over the coming years, the market potential will grow just slightly, as it is only in 2016 that the population aged 75 years or older will begin to grow more rapidly.

A guided tour

To better analyze the dynamic real estate activity in the Québec metropolitan area, three large sectors were examined: the Centre, the Northern Suburbs and the South Shore. First, the Centre sector has a slightly older population and stands out with a larger share of renter households (54 per cent). With the limited availability of lots, construction has shifted toward higher-density housing types (condominiums and rental dwellings), which have accounted for two thirds of the units started in the last five years. It should also be noted that the Québec Les Rivières zone has been the most active in the Centre sector over the last five years, with 58 per cent of the starts enumerated in this sector.

The Centre sector also shows great diversity. For one thing, there is a significant disparity in rents depending on the zone ($589 in Vanier, compared to $861 in the Haute-Ville zone) and, for another, the Sainte-Foy-Sillery zone has the highest average price for single-family homes in the CMA ($310,000) and the Haute-Ville zone has the most expensive condominiums (average price of $221,000).

The Northern Suburbs stand out with a larger proportion of homeowner households (69 per cent) and a vast territory. Residential construction has also been more active there, with 45 per cent of all starts enumerated in the CMA in the last five years. Over the same period, this sector was the site of more than half of the single-detached homes started in the CMA. As well, the resale market is more affordable there than in the Centre sector and remains favourable to sellers. Average prices for single-family houses stand at $197,000 in Charlesbourg and at $226,000 in the Laurentien zone.

The South Shore is characterized by a younger population. Residential construction was stronger there from 2005 to 2009 than during the previous five years (2000-2004), as starts reached 5,630 units, versus 5,133. On the resale market, the prices are lower, averaging at $196,000 for single-family houses and at $156,000 for condominiums. Lastly, the South Shore has the tightest rental market conditions in the CMA, with vacancy rates ranging from 0.2 per cent (Charny, Saint-Romuald, etc.) to 0.4 per cent (Lévis, Pintendre, etc.).

As Canada's national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making vital decisions. For more information, visit www.cmhc.ca or call 1-800-668-2642.

A backgrounder is attached.

    
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        CMHC Housing Market Forecasts: Province of Québec (Fall 2009)
    -------------------------------------------------------------------------

                                          2004      2005      2006      2007
                                      --------- --------- --------- ---------
    Residential Construction
      (Starts)

      Single Detached (1)               28,871    23,930    21,917    22,177
                                                   -17.1      -8.4       1.2
      Multi-Family (2)                  29,577    26,980    25,960    26,376
                                                    -8.8      -3.8       1.6
      Total                             58,448    50,910    47,877    48,553
                                                   -12.9      -6.0       1.4

    Resale Market

      MLS(R) Sales (3)                  70,669    72,670    74,192    83,847
                                                     2.8       2.1      13.0
      MLS(R) Average Price ($)         167,546   180,529   190,348   202,392
                                                     7.7       5.4       6.3

    Other indicators

      GDP Growth (%)                       2.7       1.5       1.7       2.6

      Employment Growth (%)                1.4       1.0       1.3       2.3

      Total Net Migration (4)           36,189    29,035    28,118    32,698
                                                   -19.8      -3.2      16.3

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                                                    2008    2009(f)   2010(f)
                                                --------- --------- ---------
    Residential Construction
     (Starts)

      Single Detached (1)                         19,778    17,000    18,200
                                                   -10.8     -14.0       7.1
      Multi-Family (2)                            28,123    26,300    24,800
                                                     6.6      -6.5      -5.7
      Total                                       47,901    43,300    43,000
                                                    -1.3      -9.6      -0.7

    Resale Market

      MLS(R) Sales (3)                            79,402    78,250    78,250
                                                    -5.3      -1.5       0.0
      MLS(R) Average Price ($)                   210,775   218,500   223,750
                                                     4.1       3.7       2.4

    Other indicators

      GDP Growth (%)                                 1.0      -2.0       2.1

      Employment Growth (%)                          0.8      -0.7       0.7

      Total Net Migration (4)                     39,158    43,000    44,500
                                                    19.8       9.8       3.5

    ------------------------------------------------------------------------

    Notes: (1) Dwelling for wich 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

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    -------------------------------------------------------------------------

    Note : 2010 housing starts forecast range : 34,150 to 49,950 units.


    -------------------------------------------------------------------------
                         Forecast Summary - Fall 2009
    -------------------------------------------------------------------------
                                   Single-
                          Total   detached           MLS(R)   Rental    Ave-
    Major               housing    housing   MLS(R) average  vacancy    rage
     Centres    Year     starts     starts   sales    price     rate    rent
    -------------------------------------------------------------------------
    Gatineau    2008      3,304      1,120   4,390  187,039      1.9     677
                -------------------------------------------------------------
                2009(F)   3,000        950   4,400  194,550      2.1     690
                -------------------------------------------------------------
                2010(F)   3,000        900   4,400  199,400      2.4     705
    -------------------------------------------------------------------------
    Montréal    2008     21,927      6,602  40,441  259,033      2.4     659
                -------------------------------------------------------------
                2009(F)  18,300      5,100  40,100  271,000      2.1     668
                -------------------------------------------------------------
                2010(F)  18,100      5,400  40,500  279,000      2.4     675
    -------------------------------------------------------------------------
    Québec      2008      5,457      2,031   7,838  196,839      0.6     653
                -------------------------------------------------------------
                2009(F)   5,025      1,725   7,450  210,000      0.6     663
                -------------------------------------------------------------
                2010(F)   5,000      1,600   7,700  218,000      0.8     673
    -------------------------------------------------------------------------
    Saguenay    2008        869        400   1,557  139,043      1.6     518
                -------------------------------------------------------------
                2009(F)     515        315   1,450  144,000      1.8     525
                -------------------------------------------------------------
                2010(F)     800        290   1,525  150,000      1.8     530
    -------------------------------------------------------------------------
    Sherbrooke  2008      1,627        802   1,864  179,434      2.8     543
                -------------------------------------------------------------
                2009(F)   1,565        700   1,870  186,600      3.0     555
                -------------------------------------------------------------
                2010(F)   1,345        720   1,950  194,000      3.1     565
    -------------------------------------------------------------------------
    Trois-      2008      1,148        373   1,061  132,987      1.7     505
     Rivières   -------------------------------------------------------------
                2009(F)     900        350   1,030  137,000      1.8     520
                -------------------------------------------------------------
                2010(F)   1,200        320   1,080  140,000      2.0     530
    -------------------------------------------------------------------------
    Quebec      2008     47,901     19,778  79,402  210,775     s.o.    s.o.
                -------------------------------------------------------------
                2009(F)  43,300     17,000  78,250  218,500     s.o.    s.o.
                -------------------------------------------------------------
                2010(F)  43,000     18,200  78,250  223,750     s.o.    s.o.
    -------------------------------------------------------------------------
    n/a: Not applicable
    MLS(R) is a registered trademark of the Canadian Real Estate Association
    (CREA).
    Sources: CMHC, Canadian Real Estate Association, Statistics Canada, CMHC
    Forecast 2009-2010

    Source for Quebec CMA's MLS(R) data: The Quebec Federation of Real Estate
    Boards by Centris(TM), CMHC compilation
    NOTE: Rental universe = Privately initiated rental apartment
    structures of three units and over
    

SOURCE Canada Mortgage and Housing Corporation

For further information: For further information: Caroline Léger, Communications, (514) 475-5165