Profile of the housing market, Québec City CMA
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Main current and upcoming residential projects in the Québec City CMA
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Vacancy rate for the Québec City CMA
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The housing market in the Québec City CMA exceeded expectations in 2017. First of all, the region experienced 6,640 construction starts (+39.3%), which is barely 12 less than the record level set in 2010. Additionally, the increase in resales continued for the fourth year in a row, with 6,885 transactions (+2.5%). The activity in the residential sector is largely caused by an acceleration in regional economic activity, demographic growth, constant improvement of net migration and continued good access to credit. These beneficial factors are expected to remain throughout the next year.
In 2017, residential construction had its second-best performance in more than 20 years in the Québec City area. The number of new units in the area grew by 6,640, a 39.3% increase from 2016. Rental and condominium construction starts exceeded expectations, due in particular to the launch of large projects in Sainte-Foy, Saint-Augustin-de-Desmaures and the northern outskirts. According to several analysts, these new projects are responding to a latent need caused largely by new retirees and young households. A total of 3,820 rental units were built (+36.8%), representing nearly 60% of the sector’s construction starts for the third year in a row. The condominium market made a strong comeback after a lull in 2016. Some 1,195 new units were built—an annual increase of 172.2%. This represents 18% of construction starts, compared to 9% the previous year.
Québec City’s rental and condominium market is expected to continue growing. Low vacancy rates give reason to believe that availability will remain controlled in the rental (4.5%), condominium (3.9%) and retirement home (5%) markets. Furthermore, developers are analyzing the potential to gradually launch new major projects. The areas around bridges will be popular targets for development on both the North and South shores.
In terms of absolute property, the area saw 1,521 new units, a 1% decrease from 2016. This market, which includes individual properties, semi-detached houses and row houses, is adjusting to the availability of land and the inventory of new and existing units for sale. The moderate drop in the residential sector, combined with careful management of rental unit and condominium inventories, leads us to believe that residential construction will return to a more sustainable level—around 4,000 construction starts—in 2018. The area currently has around 100 current and upcoming projects, valuing nearly $4.4B.
Interest in existing properties also grew in Québec City in 2017, for the fourth year in a row. The resale market saw 6,885 transactions, 2.5% more than in 2016. Of these, single-family homes dominated with 4,795 resales (+1%). The condominium market followed with 1,548 transactions (+5%), followed by plexes with 531 transactions (+2%). However, the high number of new entries means that the resale market is currently a buyer’s market, limiting price increases. Last year, a single-family home sold for around $250,000, a 1% annual increase. For plexes ($306,400) and condominiums ($188,000), the average price continued to drop, falling by 4% and 1% respectively from 2016.
As long as economic conditions continue to improve, the resale market will continue its upward trend in the Québec City area. Potential buyers will also continue to benefit from a diverse selection of existing properties, price increases that will remain close to the inflation rate, and favourable borrowing conditions. The year 2018 may very well hit the 7,000-transaction mark.