The black series that the Canadian real estate market has been going through for the past year is not over. And we will have to wait at least until the beginning of 2024 before seeing signs of lasting upturns in this market, estimates the Canada Mortgage and Housing Corporation (CMHC).
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“In 2023, the real estate market in the Montreal region, like in the rest of the major cities of Quebec, will experience a drop in housing starts, sales, prices and the vacancy rate, summarizes the chief analyst, market analysis, CMHC, Francis Cortellino. In short, he continues, only the rents will be on the rise.”
This is what emerges from the most recent Housing Market Outlook report, published Thursday morning by the CMHC. This annual report provides an overview of the state of the Canadian market, in particular that of the country’s 18 major metropolitan areas, and provides forecasts for each of them until the end of 2025.
A lingering crisis
For the greater Montreal area, lack of affordability, a slow job market and weak consumer confidence will pull back demand in 2023. As a result, prices and the number of transactions in the resale market will continue overall to decline during this period.
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The same phenomenon is expected for housing starts. The slowdown in construction will continue in all housing segments, from single to collective housing. CMHC estimates that this weakness will continue at least until the end of 2025.
In addition, it is indicated, cost increases will harm the emergence of new real estate complexes, thereby leading to an amplification of the current housing crisis, almost everywhere in Quebec. The median monthly rent for a two-bedroom apartment could thus be established in 2024 at $1,450 in Gatineau, $1,230 in Montreal, and $1,030 in Quebec.
Slow recovery
A certain recovery in activity could follow from 2024 and in 2025, at the same time as the Bank of Canada, satisfied with a return to control of inflation, will begin to reduce key rates, believes CMHC .
Mr. Cortellino then expects the economy to regain strength and that housing starts, sales and prices will start to rise again slowly.
“There could then be an increase, but a much more modest rate of what we observed during the pandemic years, he tempers. We will then speak of 4 to 5% increases; which would be in no way comparable to the annual increases of 10 to 20% of previous years.