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According  to  the  latest  forecasts  conducted  by  Canada Mortgage and Housing  Corporation (CMHC),  relatively slow economic  and employment growth will reduce  demand of existing and new homes  this year.  "As well, easing resale markets and
relatively high inventories of new  dwellings will significantly lower  housing starts in 2013,"  said Kevin  Hughes,  CMHC  Regional  economist  for  the  province  of  Quebec.  Nonetheless, demographic  trends  will  support  housing  demand  into  2014,  at  which  time  a  strengthening economy and tightening resale markets will energize both the resale and new housing markets.

In 2013, moderate job  growth, the continued easing of the  resale market, which is expected  to attract  a  greater  part  of  housing  demand,  and  the  trend  toward  multifamily  dwelling  will contribute  to  reduce  single  starts  and  translate  into  a  total  of  13,200  single-detached  homes started.  In  2014,  a  tighter  resale  market  will  bring  some  support  to  the  new  housing  market segment, which is expected to result in a similar number of starts as in 2013.

The trend toward the multi-family market segment is still explained by its relative affordability, the changing needs of an aging  population and by densification  trends. Fuelled by the popularity of condominium apartments, supply in  this market segment has increased  significantly. As a result of  three  years  of  sustained  construction  from  2010  to  2012,  market  conditions  in  this  market have eased notably. Starts of multi-family dwellings will thus decrease by nearly 25 per cent this year. Multiple starts will decrease below the 24,000 level in 2013 and stabilize in 2014 (23,500).

While remaining stable in 2012, sales recorded by Centris®12 have been recently declining as a result  of  the  overall  economic  context  discussed  previously.  Despite  a  certain  rebound  in  the second half of this year, resales will come in at a lower level this year. For 2013, just over 73,000 such transactions are forecast. As buying conditions improve, total resales will be back in growth mode next year. In total, 75,000 Centris® sales are forecast for 2014.

Relatively lower demand for  resale homes, combined with rising  supply, has taken pressure off price  growth in recent quarters and should  continue to do so throughout the forecast horizon.  In this context, price growth  in the resale market will continue  to moderate in 2013. The average price  recorded  by  Centris® will  reach  $268,000  this  year  and  approach  the  $270,000  mark  in 2014.


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Québec Landlords Association

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