In May, the Canada Mortgage and Housing Corporation (CMHC) released an update of its 2021–2022 housing market outlook for major Canadian cities. Here are the report highlights for the Montreal and Quebec City census metropolitan areas (CMA):
New Home Market
The CMHC anticipates that Centris sales will remain stable (or increase slightly) in 2021 for the Montreal metropolitan area. By property category, condominiums should perform better than single-family homes due to their limited supply and unaffordability. Upward pressure on prices will continue in 2021 with 15 to 20 per cent growth from the previous year. In 2022, the number of transactions in the Montreal area will experience a modest decline due to the rise in mortgage rates, the deterioration in property affordability and the fact that many households have already changed homes since the start of the health crisis.
The organization forecasts that after setting record sales in 2020, Centris sales in the Quebec City CMA will decline moderately in 2021. The strong growth in prices and low supply will limit demand and thus reduce the pool of potential buyers. However, rising mortgage rates will accentuate this decline starting in 2022, leading to an easing of market conditions and a moderate slowdown in price growth.
Housing starts will remain at very high levels in the Montreal CMA in 2021 with rental housing accounting for the largest share of new construction. The number of single-family home starts will increase considerably, although land scarcity is a major issue in the region. The limited supply of rental units and houses, combined with population growth, will drive new housing construction in 2022.
After reaching its highest level in over thirty years, residential construction in the Quebec City CMA will decline slightly in 2021, particularly in the rental housing segment. The marked enthusiasm for single-family homes since the pandemic began, combined with a relatively low supply, will drive the demand to build this type of property. The number of newly built single-family homes will therefore increase in 2021, and then decline in 2022.