Quebec housing market overview

An increase in Quebec births could lead to parents upgrading

According to recent data released by the Institut de la statistique du Quebec, births in the province have risen significantly in the past year. After increasing by almost 8% in 2006, it is expected that an additional 85,000 births will be recorded in 2007, a 3% rise. It could be assumed that that some of these new parents could look at upgrading to larger houses. The CMHC reports that while more formal research needs to be done, this assumption is supported by both resale and new home statistics. In fact, sales and starts of family homes showed notable increase in regions where the birth rate had recently jumped.

Quebec housing demand to remain strong in 2008

The conditions that sustained Quebec home buying in 2007 will continue to fuel demand in the next two years, and translate into 46,500 starts in 2008 and 45,000 the following year. Quebecs economy will be supported by strong domestic spending and rising disposable income, which will support housing demand.

Again this year, the weak spot will be the export sector which will continue to struggle with the current exchange rate and growing foreign competition. This will be especially true of the manufacturing sector. As a result, GDP will grow in the vicinity of two per cent in the next two years, while job growth will register approximately one per cent in 2008 and 2009 respectively.

While interest rates are expected to increase, their relatively low levels combined with the growing range of financial instruments should still facilitate home buying in the coming years and possibly encourage some households to move ahead their purchase plans. Population aging will continue to fuel demand for such dwellings as condominium and retirement home apartments.

Quebec MLS sales forecasted to be 79,000 in 2008

Resales: Sales of existing homes will moderate but remain strong in the coming years. Demand for existing condominiums (be they townhomes or apartments) will be robust. Sales of existing homes on the Multiple Listing Service (MLS) should be in the vicinity of 79,000 in each of 2008 and 2009.

2008 Housing prices expected to rise 3% in Quebec

With sales expected to cool and inventories expected to rise once again, price growth will not be as strong in the coming years. We expect that prices will increase by approximately 3 per cent in both 2008 and 2009, compared to over six per cent in 2007. As a result, the MLS average resale price will approach $215,000 in 2008 and $221,000 in 2009.

Quebec key stats

Metric		Quebec	Canada
Population 2007		7,700,800	32,568,000
Consumer Price Index (2002=100)		-	0.00
Average earnings (SA, $)		-	$0.00
Unemployment rate (SA, %)		-	%
Housing starts (SAAR, thousands of units)		-	0.00
Average Residential Resale Price (annual % change)	2007 (E)	$206,843 6.6%	$306,397* 10.6%
	2008 (F)	$214,600 3.8%	$322,400* 5.2%
	2009 (F)	$221,000 3.0%	$334,500* 3.8%
Mortgages approved by lenders, residential 2006	Chartered banks	$17,669,506,000	$152,478,903,000
	Trust companies	$957,821,000	$6,664,898,000
	Life and companies other	$7,262,741,000	$30,225,144,000
	Total	$25,890,068,000	$189,368,945,000

Source: Stats Canada, CMHC
2007 E = estimated by the CMHC
* Canada calculation excludes Yukon and Northwest Territories
Data based on application received date
Mortgage approval data are gross and may not fully capture lending activities of credit unions, caisses populaires, other smaller institutions and privately-insured loans in some areas
Quebec data is understated due to low response rate to the surveys in that province.
*Conventional Lending data only

Local Market Indicators

Sources: CMHC, Canadian Real Estate Association, Local Real Estate Boards, Statistics Canada

Census Metropolitan Area		Total Housing Starts	MLS sales	MLS average price
Gatineau	2007	2,788	4,537	$182,477
	2008 (F)	2,500	4,550	$185,000
	2009(F)	2,400	5,000	$187,000
Montreal	2007	23,233	42,800	$251,000
	2008 (F)	22,600	41,500	$263,500
	2009(F)	21,900	40,700	$274,000
Quebec City	2007	5,284	7,684	$176,097
	2008 (F)	5,000	7,500	$188,000
	2009(F)	4,850	7,500	$197,000
Saguenay	2007	685	1,260	$136,977
	2008 (F)	1,100	1,225	$150,000
	2009(F)	500	1,200	$160,000
Sherbrooke	2007	1,318	1,872	$177,281
	2008 (F)	1,293	1,900	$ 186,145
	2009(F)	1,286	1,919	$193,591
Trois-Rivieres	2007	1,197	863	$128,000
	2008 (F)	1,150	825	$136,000
	2009(F)	975	775	$143,000

Sources: CMHC, Canadian Real Estate Association, Local Real Estate Boards, Statistics Canada
MLS = Multiple Listings Service