01 Apr Desjardins Market Forcast For Quebec
DESJARDINS MARKET FORCAST FOR QUEBEC
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On March 23, Desjardins published its forecasts for Québec’s resale housing market. According to their forecasts, the number of existing home sales is expected to grow by 2.3 per cent in 2017 to reach 80,000. Despite the latest mortgage tightening measures, Desjardins considers that the low unemployment rate and the increase in after-tax income will be able to counter the negative effects of these measures. Québec’s unemployment rate is at its lowest level in approximately 40 years and, in 2016, after-tax income saw its biggest increase since the 2008 recession. As for the average price of properties, Desjardins expects an increase of 3.5 per cent in 2017.
According to Desjardins, the drop in the supply of properties on the resale market and the tightening of market conditions in several areas for single-family homes should result in new housing starts jumping by 6.9 per cent to reach 16,500 units. Furthermore, the surplus of condominiums is slowly being reabsorbed, which should ensure that housing starts for this type of property also increase in 2017.
Finally, Desjardins notes that caution should be used regarding rental apartment housing starts as vacancy rates remain high throughout the province. While the vacancy rate equilibrium point is 3 per cent, the province’s vacancy rate is around 4.5 per cent, ranging from 4 per cent in Montréal to 7 per cent in Saguenay.
Recent Economic Indicators Courtesty Of The QFREB
The Bank of Canada (BoC) announced on March 1 that it was maintaining its key interest rate at 0.5 per cent. The BoC notes that with the latest statistics on consumption and housing, growth in the fourth quarter of 2016 was stronger than expected.
Canada’s gross domestic product (GDP) grew 0.3 per cent in December 2016. Statistics Canada noted that offices of real estate brokers posted a 2.7 per cent increase, after registering a 6.4 per cent decline in November, due to the changes in mortgage lending rules.
According to the Canadian Real Estate Association (CREA), 37,379 residential properties were sold in Canada in February 2017, which represents a slight decrease of 2.6 per cent compared to February 2016. According to CREA, the average price for all residential MLS® properties sold in Canada in February 2017 reached $519,521, which represents an increase of 3.5 per cent from one year earlier. However, CREA noted that if the housing markets of Vancouver and Toronto were excluded from the calculations, the national average would be reduced to $369,728.