Quebec’s housing market is seeing a strong rebound, with 47,664 housing starts in 2017, the highest annual starts since 2000. This represents a 7 per cent increase from the previous year.
According to the Canada Mortgage and Housing Corp., the province is on pace to see similar starts this year, with 19,000 multi-family starts expected in Montreal. The resale-housing sector is also performing well, with 82,600 sales through the multiple listing service in 2017.
Desjardin, the Quebec credit union, forecasts that sales will be slightly lower this year due to higher mortgage rates. However, the Quebec housing market remains strong, with average home prices expected to increase by about 5 per cent to $315,000 in 2018.
The economic backdrop in Quebec is extremely favourable, with a consumer confidence index at its highest level in 12 years. Many consumers are planning to make a major purchase in the coming months, according to Desjardin.
This confidence is tied to strong employment, with Quebec’s jobless rate falling to 4.9 per cent in December, the lowest monthly rate in 40 years. Increases in full-time work accounted for almost all the 86,700 jobs added in 2017.
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The strong housing market is adding even more jobs, with the City of Longueil planning a $500 million mixed-use development that will include over 500 condos. This project will be ongoing for years and is indicative of the most hectic Montreal construction pace in decades.
High immigration will underpin Quebec’s housing market, with total net migration expected to reach 46,000 annually over the next two years. The Quebec government has no plans for a foreign-home buyer tax, but will monitor the purchase of homes by foreign investors.
According to the Canada Mortgage and Housing Corp., the number of foreign homebuyers in Montreal increased by 30 per cent in the first half of last year. However, the total number of foreign buyers in the city still accounted for only 1.3 per cent of all real estate transactions in the six-month period.
Paul Cardinal, an analyst with the Quebec Federation of Real Estate Boards, said the number of foreign buyers is still too low to have a significant impact on Quebec housing prices. The Quebec housing market is expected to remain strong, driven by favourable economic conditions and high immigration.
