The shortage of rental and residential housing is not on the way to be absorbed this year in the greater Montreal area, the various experts consulted by The duty. This scarcity, which manifests itself in municipalities increasingly distant from the metropolis, moreover particularly affects low-income households.
At the start of the pandemic, the Canada Mortgage and Housing Corporation (CMHC) predicted a significant drop in property values due to the economic repercussions of the containment measures put in place. Rather, the opposite effect has occurred. Thus, in 2020 as in 2021, property values increased at a record rate, with demand from buyers being stimulated by the increased use of teleworking and the increase in the purchasing power of many consumers, who have reduced for decades. month their expenses attributed among other things to travel or cultural outings, pandemic obliges. Low interest rates have also made real estate transactions easier.
“People want to buy; there is like a frenzy about it, ”confirms real estate investor Jean-François Tremblay.
The enthusiasm of buyers has in fact become so important that it would be necessary to triple the number of homes available for resale so that the market, which “strongly favors sellers”, becomes “balanced” again in the greater Montreal area, illustrates the Duty CMHC economist Francis Cortellino. “The leap to take is enormous,” he adds.
Price increases of around 15 to 20% in one year were thus noted in several regions of the province last year, due to this scarcity of supply, which will probably last into 2022. Anticipating a slight drop in demand, the firm Royal LePage foresaw an 8% increase in property values in the Montreal region in mid-December in 2022. The rise of the Omicron variant, which has led to the return of the closure of various locations cultural, bars and dining rooms restaurants, could however have the effect of “increasing demand” on the real estate market, as we saw after the confinement of March 2020, foresees the general manager of Royal LePage, Georges Gaucher.
The pandemic, which is stretching, could also continue to exacerbate demand from Montreal buyers in cities increasingly distant from the metropolis, such as Saint-Jean-sur-Richelieu and Joliette, adds Mr. Gaucher. “There has been and still is a movement from the city to the suburbs, and from the suburbs to the resort markets,” he confirms.
“If we are talking about the suburban third ring and even outside the greater Montreal region, we are in a situation where there is a certain enthusiasm for the rental and residential market”, also notes the director of the economic service. to the Association of Construction and Housing Professionals of Quebec, Paul Cardinal.
The latter estimates that between 40,000 and 60,000 homes should be built in the province to meet current demand. However, due to the surge in property values and construction costs, Mr. Cardinal is instead anticipating a slowdown in housing starts this year. The shortage is therefore not on the way to abating.
An affordable housing crisis
The rental market is struggling with a shortage of affordable rental housing. A report from the Montreal Metropolitan Community released last year shows that the housing supply in Montreal and its suburbs drops dramatically when it comes to affordable apartments available for rental. On the Island of Montreal, for example, the vacancy rate for family dwellings with three or more bedrooms stood at 3.6% at the end of 2020, but this percentage falls “to less than 1%” in this regard. which relates to units with a monthly rent of less than $ 925.
“What is clear is that the housing shortage reveals an even more fundamental problem, which is a housing affordability crisis,” confirms the professor at the School of Social Work at UQAM and housing specialist Louis Gaudreau.
The rise in construction costs has also exacerbated this phenomenon. “It just cost 15% more to build them [les logements], so we are moving towards higher rents to make these new buildings profitable [locatifs] », Relates Paul Cardinal.
The CMM document also mentions an average gap of 36% – or $ 320 – between the average rent of occupied housing and that of vacant apartments ready to welcome new tenants.
“What we see is that with the shortage of affordable housing, we see an increasing number of badly taken tenant households, despite the availability of apartments,” also said the spokesperson for the Front. of popular action in urban redevelopment, Véronique Laflamme. Due to rapidly rising rents and evictions carried out for speculative reasons, more and more tenants are finding themselves homeless on 1er July, in Montreal, but also in several other cities of the province, she recalls.
In this context, Mme Laflamme urges Quebec to devote more funds to the construction of social housing, in particular to facilitate the application of the By-law for a mixed metropolis in Montreal, as demanded by Mayor Valérie Plante. The Legault government could also grant funds to municipalities wishing to acquire land to build social housing, notes Louis Gaudreau.
Investor Jean-François Tremblay, for his part, believes that the terms of federal programs dedicated to the financing of new affordable housing should be relaxed. Because, currently, “the majority of owners are discouraged” along the way, he says. And affordable housing is ultimately few to see the light of day.