Despite the Canadian multifamily housing market seeing a measure of success in the past few months, it is a different story in Montreal, with condo sales weakness starting in 2019 to endure for at least two years.
In its recent analysis, Altus Group noted that the current market context amid the COVID-19 outbreak will have very real effects upon Montreal’s multi-family segment.
For Quebec, “expect lower starts ahead as eroding affordability, limits on immigration and slower economic growth cool what has been a relatively hot housing market,” Altus Group cautioned.
And even though Montreal’s employment growth will remain stable this year and the next, accompanied by low mortgage rates boosting housing activity, “expect annual levels in 2020 and 2021 to be below 2019.”
“Above‐inflation price appreciation in the resale and new home markets has negatively impacted affordability (offset partially by lower mortgage rates), at the same time as immigration restrictions begin to have their impact on population growth,” the Altus report stated.
“Apartment starts in 2020 will be pulled down by the 18% decline in new condominium apartment sales in 2019 and not likely to improve in 2021.”
These trends will reverberate upon overall housing starts in the next few quarters.
“Total Canada‐wide housing starts in 2020 are forecast to match last year on the strength of Ontario, Alberta and Saskatchewan. In 2021, expect weakness in Quebec, Manitoba and Atlantic Canada to be offset by gains elsewhere.”