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Quebec's housing affordability erodes further

Quebec's housing affordability erodes further

According to the results of latest monthly survey conducted by Canada Mortgage and Housing Corporation (CMHC), residential construction in Quebec was on the rise in December. In all, 3,548 housing units were started in urban centres with 10,000 or more inhabitants, for an increase of 3 per cent over December 2005. The December result brought the annual total to 39,486 starts, down by 4 per cent in relation to the level recorded in 2005.

"As expected, the slowdown that began in 2005 continued in 2006. Modest economic growth, the increase in mortgage costs and the decrease in pent-up demand are all factors that reduced demand for homeowner housing. On the other hand, steady migration and the aging of the population supported demand for multi-family housing and allowed the new home market to end the year at a still rather high level," said Kevin Hughes, Senior Economist at CMHC for the province of Quebec.

Single-detached home building registered an increase of 1 per cent in the province. In fact, 1,175 dwellings of this type were started this past December, compared to 1,161 during the same period the year before. This result was due to the significant increases recorded in the census metropolitan areas (CMAs) of Ottawa-Gatineau (Quebec part) (+24 per cent) and Montréal (+6 per cent). Elsewhere across Quebec, the other CMAs showed negative results in this market segment. In urban agglomerations with 50,000 to 99,999 inhabitants, housing starts were down slightly (-4 per cent) in relation to December 2005. In the smaller centres (10,000 to 49,999 inhabitants), however, construction was more active, with a gain of 6 per cent in the last quarter of 2006 over the same period in 2005.

Urban multiple starts posted a slightly better performance than single starts, with a gain of 4 per cent in December over the same month in 2005. Trois-Rivières (over 100 per cent) and Gatineau (over 100 per cent) registered the most remarkable gains. Starts of this type fell by 37 per cent in centres 50,000 to 99,999 inhabitants in December, compared to one year earlier, and by 5 per cent in the smaller urban agglomerations (10,000 to 49,999 inhabitants) this past quarter, in relation to the same quarter in 2005.

The good performance of the multi-family housing segment in December and throughout 2006 was mainly attributable to semi-detached and row home building. With an increase of 20 per cent over December 2005, it can be said that this type of housing continued to gain in popularity, while condominium construction lost some ground (-33 per cent).

The regional results revealed a few disparities. While, in Montréal and Québec, 2006 finished with decreases, the other areas ended the year with gains. In most cases, it was the multi-family housing segment that accounted for a good share of the activity.

Elsewhere in Canada, only Ontario (-7 per cent), Prince Edward Island (-6 per cent) and Newfoundland and Labrador (-15 per cent) followed the same trend as the province of Quebec in terms of annual starts in 2006. The other provinces recorded positive results.

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 or call 1-800-668-2642.

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Québec Landlords Association (1)

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