Outlook for Housing Starts 2009-2013

The outlook for the housing market is more buoyant heading into 2010. Over the long-term it is expected that the global economic recovery will become a positive influence on Canada’s economy and housing market. As a result, residential construction will gradually increase as factors that drive housing become more stimulative and housing demand moves more in line with demographic fundamentals.

Quebec

Over the course of the next five years, new home construction in Quebec will gradually moderate to levels that are commensurate with projected household formation.

A number of factors are at play in this movement.

To begin with, Quebec’s labour market will grow moderately, partly as a result of population aging.

Moreover, existing home markets will move from sellers’ to more balanced conditions, reducing demand for new homes.

Finally, the decrease in the rate of growth of the population aged 75 years or older, which will occur over several years, will take the pressure off the construction of retirement homes.

As a result, housing starts in Quebec will decrease from 43,300 Canada Mortgage and Housing Corporation Housing Market Outlook - Canada Edition - Date Released: Fourth Quarter 2009 units in 2009 to 38,000 units by 2013.

Despite this moderation, new home building will remain at relatively high levels when compared to recent history. Not all segments of the housing market will be impacted in

the same way; demand for new single detached homes is likely to follow economic conditions while new multifamily housing will be conditioned by the demographic factors mentioned above.