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.