Residential Housing Market
|| 2011 was in line with our expectations
The performance of the residential housing sector in the Quebec
City CMA in 2011 was in line with our expectations. Housing starts
tapered off (-18.1% compared with 2010), with a total of 5,445 new
units. It should be noted that this decline is not as dramatic as
it might seem: 2010 was a record-breaking year, with 6,652 new
units. In addition, 2011 was the third-strongest year for
residential construction out of the past six years. The resale
market posted an increase of 1.8% (7,209 units).
The fact that housing starts and the resale market moved in
opposite directions in 2011 did not affect the housing market's
consistent performance in the Quebec City region over the past 10
years. On the one hand, demand for access to property is driven by
job creation, immigration, higher income levels and favourable
credit conditions. On the other hand, the supply of new and
existing properties remains tight, thereby maintaining a
sustainable equilibrium for housing starts and the resale market.
These factors will play an equally beneficial role in 2012.
|| 2012: a replay of 2011
In 2012, we predict that approximately 5,000 new units will be
constructed, which would be a good performance overall. The region
will continue to benefit from a number of the abovementioned
factors. However, new inventory must be sold off. The increase in
the number of properties listed in the resale market means that
potential buyers have more choice. In addition, the shortage of
available land and the steady increase in the price of new
properties will constrain certain projects. Meanwhile, the resale
market will continue to grow this year, with nearly 7,500
properties set to change hands. The increase in new listings, a
non-existent speculative bubble and low interest rates will drive
the transaction market.
|| Renewed interest in condos
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For the second year in a row, condominiums accounted for the
largest number of housing starts in Quebec City in 2011. A new
record of 1,986 new units was set, or 259 more than in 2010. In the
resale market, 1,794 condominiums changed hands; this figure is
similar to that recorded in 2010. The renewed interest in condos,
which are an attractive alternative for those who wish to get onto
the property ladder without the constraints of a single-family
home, remains particularly high among retirees and young
households. In addition, these projects are no longer concentrated
exclusively in the central districts of Quebec City and Lévis.
Demand is also high in the suburbs, including Saint Augustin, Lac
Beauport and Orleans Island. In 2012, the condo market will
continue to be favourable, although the number of new units should
remain under 2,000. The market will have to adjust to the projects
that began in 2011 and that are still underway, as well as to the
increase in the number of existing units available (+45% in
2011).
|| An affordable alternative
CONDOS AND
SEMI-DETACHED/
ROW HOUSES
REMAIN
AFFORDABLE
ALTERNATIVES
The Quebec City region also set a new record for the number of
semidetached and row houses in 2011, with an additional 1,063 units
built, 33 more than in 2010. The cost of acquiring a semi-detached
or row house is often less than that of a single-family home; this
means that they are an affordable alternative for young households
wishing to get onto the property ladder for the first time. Demand
will remain steady in 2012 due to recent gains in the labour market
and favourable borrowing conditions. However, the need to sell the
units built in 2011 may cause the number of housing starts to drop
below 1,000 units this year.
|| A brief lull in rental housing construction
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For the first time since 2001, the region added fewer than 1,000
new rental units in 2011 (865 apartments). The completion of major
residential projects begun in 2010 and, consequently, an increase
in the new housing stock to be sold, meant that other projects were
simply postponed. There is still a shortage of rental housing in
Quebec City, as indicated by the low vacancy rate (1.6%) in 2011.
In 2012, all indications are that the number of new apartments will
top 1,000 units once again. New phases will be undertaken in three
key developments (Jardins de Vérone, Seigneurie de Beauport and
Gibraltar).
|| Single-family homes: downward trend
The construction of single-family homes repeated a downward
trend in 2011, with 1,349 new units added, or 419 fewer than in
2010. The region has returned to the levels observed in the early
2000s. Despite higher household incomes and low mortgage rates, the
shortage of affordable available land and price increases are
constraining some projects. 2011 also saw an increase in the number
of existing properties for sale (+23%), thus offering new
alternatives to potential buyers. For those same reasons, the
number of new single-family homes will continue to hover around the
1,000-unit mark in 2012.
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