According to the latest forecasts conducted by Canada Mortgage and Housing Corporation (CMHC), the impact of slow economic growth will be compensated by still favourable borrowing conditions and demographic factors, which will support new home construction in 2012 and 2013.
"The current climate of uncertainty regarding economic prospects abroad will lead to less vigorous household spending and private investment in the province. Due to these factors, it is expected that provincial GDP will grow by 1.8 per cent in 2012 and by 2.0 per cent in 2013. This environment, combined with a more balanced resale market, will lessen the demand for new homes," said Kevin Hughes, CMHC Regional economist for the province of Quebec.
However, in the coming years demographic factors will sustain the province’s housing markets and change their complexion. While strong net migration to the province will continue to have a positive impact on the rental and resale markets, levels are expected to remain stable over the coming years as no significant change in immigration targets is expected. Population ageing, on the other hand, will have a growing impact on the dynamics of the housing market as older households re-enter the market in response to their changing housing needs.
After 2011’s decline in single starts, a rebound is expected this year as 18,000 single detached homes will be started in 2012, an 8.7 per cent increase. Moving ahead, however, the rising popularity of more affordable multi-family homes and densification trends will limit gains in this market segment somewhat with 2013 seeing 18,800 units built.
Following a year of sustained construction in 2011, starts of multi-family dwellings will settle back to more sustainable levels over the course of the next two years. For 2012, multiple starts are expected to be about 26,300 units. Given the current supply of condominium tenure apartments on the market and given the lower growth rate of the population aged 75 and over, which will continue to limit demand for retirement (rental apartment) homes, starts of multi-family homes will remain at a similar level in 2013.
After recording a slight drop last year, sales recorded by the MLS® system will edge up in the coming years. For 2012, a 1.9 per cent increase is expected to 78,750 resales. In 2013, growth will improve to 3.2 per cent, approximately 81,250 resales.
Relatively stable demand for resale homes, combined with rising supply, will take some pressure off prices. With a return to more balanced conditions, price growth in the resale market will moderate to about 2.0 per cent for both 2012 and in 2013, pushing the average MLS® price to $257,300 and $262,500, respectively.
"The current climate of uncertainty regarding economic prospects abroad will lead to less vigorous household spending and private investment in the province. Due to these factors, it is expected that provincial GDP will grow by 1.8 per cent in 2012 and by 2.0 per cent in 2013. This environment, combined with a more balanced resale market, will lessen the demand for new homes," said Kevin Hughes, CMHC Regional economist for the province of Quebec.
However, in the coming years demographic factors will sustain the province’s housing markets and change their complexion. While strong net migration to the province will continue to have a positive impact on the rental and resale markets, levels are expected to remain stable over the coming years as no significant change in immigration targets is expected. Population ageing, on the other hand, will have a growing impact on the dynamics of the housing market as older households re-enter the market in response to their changing housing needs.
After 2011’s decline in single starts, a rebound is expected this year as 18,000 single detached homes will be started in 2012, an 8.7 per cent increase. Moving ahead, however, the rising popularity of more affordable multi-family homes and densification trends will limit gains in this market segment somewhat with 2013 seeing 18,800 units built.
Following a year of sustained construction in 2011, starts of multi-family dwellings will settle back to more sustainable levels over the course of the next two years. For 2012, multiple starts are expected to be about 26,300 units. Given the current supply of condominium tenure apartments on the market and given the lower growth rate of the population aged 75 and over, which will continue to limit demand for retirement (rental apartment) homes, starts of multi-family homes will remain at a similar level in 2013.
After recording a slight drop last year, sales recorded by the MLS® system will edge up in the coming years. For 2012, a 1.9 per cent increase is expected to 78,750 resales. In 2013, growth will improve to 3.2 per cent, approximately 81,250 resales.
Relatively stable demand for resale homes, combined with rising supply, will take some pressure off prices. With a return to more balanced conditions, price growth in the resale market will moderate to about 2.0 per cent for both 2012 and in 2013, pushing the average MLS® price to $257,300 and $262,500, respectively.