The number of residential construction sites will still be strong during the year 2008, with no less than 46 600 of them in Quebec. The CMHC (Canadian Mortgage and Housing Corporation) announces that this pace should be maintained in 2009 when 45 750 building sites are expected.
This trend will maintain itself at the level of construction sites as well as in the field of mortgage interest rates, employment and immigration until the end of 2009.
Bertrand Recher, principal economist at the CMHC has stated: « Even if the conditions related to the acquisition of a habitation have, lately, been less favourable than before, economic growth and demographic development observed during last year will contribute to maintain demand for housing in the Province at relatively high levels, in 2008 as well as in 2009. The provincial economy will develop thanks to local expenses and investments, whereas recent job growth and the increase in disposable income will continue to feed demand. Also, the high value of the Canadian dollar has stimulated private investment. In the short term, public works on infrastructure by the Government and tax reductions will be important factors of economic growth. »
On the other hand, the analyst specifies that the export perspectives remain morose for Quebec, whereas the present exchange rate, growing foreign competition and shrinking international demand, more in particular in the manufacturing sector, continue to sap growth of the GNP.
The Quebec rate of economic growth should set itself at 0,9 % this year, and could be less than 2 % in 2009. As far as employment is concerned, growth should establish itself at 1 %.
Specialists at the CMHC also believe that interest rates of mortgage loans should only slightly increase, even in 2009. One expects construction sites for 20 000 individual homes in 2008 as well as in 2009. At the level of elderly people’s homes, building sites will decrease for the first time after many years of strong activity. Nevertheless, one expects construction of 27 500 apartments of this type in 2008 and another 26 000 in 2009.
Finally, with shrinking sales and an increase of inventories, price growth will level out over the next few years. Price increases for houses should not exceed 5 % in 2008, as well as in 2009.