''I will get right to the point, and will tell you about a vital element for the future of the Québec housing market, namely closer linking between the public and private sectors, between the strength of imagination and of know-how. And why would this lead to greater success? Because the observations that we have been able to make about the housing market in Québec, in Canada and elsewhere, had led us to think that the market is ripe for affordable housing in all its forms.”
This is how André Filion, Vice-President, Société d'habitation du Québec (SHQ) (Québec Housing Corporation QHC) began his address during the last Québec forum on real estate investment held in Montréal. More than 400 decision-makers gathered for the event.
The current market
Mr. Filion states that the activity in the Québec housing sector represented 7.2% of the Gross Domestic Product (2004 figures) or 20 billion dollars divided between construction and renovation. Another observation shows that there is imbalance in the residential portion while supply is under demand. Strong growth in residential start-ups has allowed a peak to be reached in 2004 with 58,500 start-ups. On the other hand, a slight slowdown in start-ups was observed last year. This should continue in the coming months.
In Québec, 58% of dwellings are owned (three million rental units form the housing sector in Québec) and 42% are rented. Montréal has an ownership ratio of 35% compared to Gaspé where it is 76%.
Other interesting figures include: In Québec, only 9 % of owned rental units with 200 units or more are located in apartment buildings, whereas 42 % of the industry comprises ownerships of less than six units and 9% with only one rental unit.
Québec is clearly populated by small ownerships compared to other regions in the country such as Toronto and Vancouver. ''The comparison of Montréal – which has 55,300 owners-renters – to Toronto with 8,200 and Vancouver with 4,100 shows the situation clearly,” said Mr. Filion.
As far as cooperatives are concerned, this type of lodging is remaining popular, and interest is now spreading more and more throughout Québec. In 2004, 27% of start-ups in urban centres were for cooperative lodgings.
The construction industry
2004 was a remarkable year for construction in Québec. There were 11,300 firms employing 42,300 employees. The salary mass was 600 million dollars. More than 275,000 direct and indirect jobs were created that year by the construction industry.
The future of the residential market
''Other than the aging of the population, which characterizes most developed societies, there will be decreases in the size of households. If you prefer, this means that there will considerable growth in households with one person and with households comprising couples under 25 without children. In Montréal alone, close to 40% of households are composed of single people, added Mr. Filion.
Mr. Filion believes that the demand for cooperatives will double. If in 2001, 100,000 cooperative units represented 3 % of the market, we can estimate that by 2030, there should be 360,000 units representing 9 % of the market. ''As the growth pattern of households is decreasing, start-ups will adjust themselves progressively so that by 2020, there will be as much production of new housing units as the creation of new households, or around 20,000 in both cases.”
Trends
Mr.Filion stresses five strong trends that in his opinion will provide as much opportunities for business. First, there will be projected concentration in the market brought on by the progressive decrease in owner-renters. Then there should be decrease in production for the Québec market, and other markets will be explored further and further. The cooperative market will increase in popularity and there will be an increase in the demand of affordable rental units that is quality units representing a reasonable financial burden on households.
André Filion feels that affordable housing will be in strong demand a turnabout not only for the Québec market but also for Europe and elsewhere on the planet where the cost of construction is very high. He believes that the demand for affordable housing should involve the private sector. He reminded his audience that the SHQ had a mission of facilitating access of Québecers to good housing conditions and quality of living areas as well as fostering the development of Québec know-how in housing.
As part of the SHQ’s ongoing efforts, the AccèsLogis Québec and the Logement Abordable (Affordable Housing) programs were formed that will lead real estate project promoters to create and offer affordable but high quality lodging on all Québec territory. Mr. Filion reminded the audience that these two programs have led to the creation of 18,600 lodging with affordable rents. These have generated investments of $1.7 million.
The positive side of globalization
Globalization presents many disadvantages but also many advantages too. The SHQ Vice-President believes that globalization presents an advantage for Québecers through the rapid sharing with the rest of the planet of the effective initiatives we have introduced in housing. Regarding affordable housing only, two thirds of the world’s population live in inadequate lodging which makes the creation of affordable lodging even more pressing in developed countries as in under-developed countries.
Québec has already entered into an agreement with the British corporation Accent Group. This is an excellent example of possibly exporting our know-how in housing. This English organization specializes in offering social and affordable housing, and projects building several thousand housing units produced in Québec and delivered to Great Britain. These would generate economic fallout of tens of millions of dollars per year.
Québec is already present on the British market and is building high quality residential housing. In fact, houses made in Québec currently are being sold between $500,000 and $900,000 in Canadian dollars on the London market.
In conclusion
The growth of the Québec housing market represents some limitations, but these same limitations can be converted into new business ventures which will have a positive impact on Québec society as a whole. ''Affordable housing will be at the heart of the concerns of Québec consumers in the years to come,” adds Mr. Filion.
He also believes that the industry will have to adapt to the domestic market and also turn to exporting to maintain its level of activity.
''Québec has a housing industry that has proved itself in the construction and exporting of manufactured modular homes, and in the management of projects to train foreign manpower. If we can put together a true private-public partnership by mobilizing all manufacturing, financial and corporate sectors, le Québec could not only take up the challenge of transforming its market, but could also export its knowledge,: concluded Mr. Filion.
The SHQ looks for strong cooperation between the public and private sectors to house Québecers well
