Quebec will see only moderate economic growth next year, although enough to maintain the current level of housing demand, according to a presentation by industry experts from the Canada Mortgage and Housing Corporation.
The CMHC presented its annual Housing Outlook Conference in Montreal Wednesday to about 1,000 industry professionals. Presenter Kevin Hughes, regional economist at CMHC for Quebec, said the province won’t see economic growth surpass 2% next year, and employment growth will be a modest 1.4%.
“The economic environment, while moderate, will nevertheless support housing demand next year,” Hughes said. “The demographic trends will continue to have an impact on the market, especially on the demand for apartments – rental and condominium.”
Demand in Montreal especially has been for condos, leading builders to focus primarily on that housing segment. Condos will be the only segment not to decline in Montreal this year, setting a new starts record for a second straight year, said the CMHC.
But that trend will halt next year, when a decline in the condominium segment will be the result of the wide array of product already available to buyers.
The rental vacancy rate will decline again in 2012, however, from 2.7% in October to reach 2.3% in 2012.
CMHC President and CEO Karen Kinsley also presented at the conference, providing a national outlook. The strong national fundamentals will lead to more stability in 2012, she said.
“The resilience of Canada’s housing finance system can be linked to a combination of factors, including prudent mortgage lending and insurance practices, a strong banking sector and careful regulatory oversight,” she said.
The CMHC forecasts housing starts to stabilize to moderate levels in 2012, to about 186,750.
“Despite continued uncertainty in the global economy, Canada’s economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration,” said Bob Duga, chief economist at CMHC. “These factors will continue to support Canada’s housing sector in 2012.”