Quebec : Over the course of 2009, Residential construction has slowed in response to weaker economy

As a result of improving global and national economic conditions, Quebec’s economy will begin to recover in the latter part of this year. Domestic consumption is already

showing signs of growth. The Quebec economy will grow by 2.1 per cent in 2010, and employment growth in the province will improve, reaching 0.7 per cent in 2010.

Over the course of 2009, a weaker economic environment, combined with increased supply of homes in certain market segments, has lowered housing construction. In 2010, a recovering economy, a still favourable borrowing environment, and a tighter resale market will translate into sustained new home construction. All-in-all, 43,000 starts are expected in

the province in 2010. Sales of existing homes will surpass the 78,000 mark next year as well. At 43,000 units in 2010, the pace of housing starts in Quebec will be high relative to

demographic requirements. The province’s evolving demography will continue to fuel housing demand through 2010. While the effects of population aging continue to impact

multi-family housing, the recent increase in the birth rate may also be a source of demand. Finally, increasing net migration will stimulate demand for rental housing.

In Detail

Single Starts: Single starts will benefit from the improved economic and financial environment as well as reduced supply in the resale market. However, single starts will continue to be challenged by the more affordable resale market and semi-detached

homes. Just over 18,000 single detached starts are expected in 2010.

Multiple Starts: Two phenomena will restrain production in this market segment; the lower growth rate of the population aged 75 and over, which will limit demand for retirement

homes, and the current level of supply, which will remain relatively high. Starts in this category will moderate to approximately 24,800 units in 2010.

Resales: Sales of existing homes will remain positive in 2010. Demand for condominiums (town houses or apartments) will be an important component of resales. However, a

slowly recovering job market and lower supply will constrain sales activity. The Multiple Listing Service (MLS®) will record over 78,000 sales in 2010.

Prices: Sustained sales activity and stable inventories will continue to exert some pressure on prices inQuebec’s resale market. As a result, the MLS® average resale price will post growth of 2.4 per cent to just under $224,000 in 2010.