Canada’s real estate market is an increasingly stable and smart place to invest. While most countries around the world are experiencing real estate turmoil, Canada’s housing market continues to thrive for many reasons. There are several trends and factors that will positively impact the future of Canada’s housing market. These include Canada’s competitive mortgage rates, and an increase in economic and political variables, including employment, income, net migration, resale market, vacancy rates, and the stock of new and unoccupied housing units.

Mortgage rates, both short-term and variable mortgages, are expected to remain at historically all time lows, which in turn, will support housing demands. Current mortgage rates are expected to stay steady during 2012, and start to increase moderately by the end of 2012, and into 2013. Market conditions are expected to remain balanced through 2013, and housing prices are expected to rise from an average of $372,700 in 2012, to $383,600 in 2013.

Employment rates in Canada continue to improve. From March 2011-March 2012, employment increased by 1.1 percent (+197,200 jobs), and the unemployment rate remained the same, at 7.2 percent. Looking ahead, employment is expected to increase 1.3 percent for the remainder of 2012, and 2.0 percent in 2013. These increases will undoubtedly support the Canadian Housing Market.

Growth in income is expected to continue to rise, which will also support the demand in the housing market. In relation to other countries, Canada’s economy is expected to mature, attracting more immigrants (net international migration), which in effect, will increase the net migration of the country. In Canada, there has been a steady increase of immigrants – 234,652 in 2007 to 263,800 in 2013 (forecasted), further increasing the demand of housing and rentals, allowing vacancy rates to rise as well. In the past year, the stock of unoccupied new housing units has remained steady, proving that there is a high demand for newly constructed housing in Canada.

Montréal, the second largest city in Canada is a great place for real estate investment for many reasons. Due to low interest rates and an increase in employment rates, demand in Montréal’s real estate resale market will rise in 2012, with a 5.0 percent increase over last year. On the supply side, listings in 2013 will stay on an upward trend, reaching 28,000 units on average. The stable demand for resale homes, combined with rising supply has taken pressure off prices in recent months and will continue to do so in the near term. Within the several different housing segments in the province of Quebec and in the city of Montréal, the condominium segment continues to grow and post gains.

Within all of Montréal’s housing market, the condominium segment is continuing to experience the most growth, making it a great place for investors right now. In quarter one of 2012, there were 12,215 residential MLS® sales transactions in the Montréal Metropolitan area – a 5 percent increase from quarter one of 2011. Quarter four of 2011 and quarter one of 2012 have shown increases in all segments, and “for a tenth consecutive quarter, condominiums posted the best results, as sales of this property category grew by 6 per cent compared to the first quarter of last year”, says Diane Ménard , Vice-President of Real Estate Boards for the Montréal area. Furthermore, the condominium segment experienced a 4 percent increase in median prices in the first quarter of 2012, further. Within the Montréal metropolitan area, Vaudreuil-Soulanges experienced the largest increase in sales for the second consecutive quarter, at 10 percent. Sales on the South Shore increased by 7 percent in quarter one of 2012, sales on the north shore grew by 6 percent when compared to quarter one of 2011, and on the Island of Montréal, sales increased by 3 percent. Between January and March 2012, sales in Laval held steady.

As housing listings increase throughout 2012 and into 2013, more people are turning away from single-detached homes, in search of more affordable options, allowing the condominium category to be the only segment to undergo optimal balance and growth. In 2011, a new record of 12,681 unit starts was reported in the multiple family housing segment, which is largely attributed to condominiums. In addition to the affordability and convenience factors associated with owning a condominium, many developers and builders prefer the construction of this type of unit – due in part to an increase in land prices and construction costs in Quebec. Furthermore, as the demand of condominiums increase, additional needs for construction on these units are rising. In effect, the rise in inventory will remain limited, and condominium construction will continue to remain strong.

Total Net Migration in Quebec is forecasted to be at 44,500 persons in 2013, an increase of 13,660 persons since 2007, contributing heavily to a growth in the housing market in the coming years. Quebec’s employment rate is forecasted to increase 2.0 percent in 2013, another advantageous factor for the housing market. With a return to more balanced conditions, price growth in the resale market will moderate over the course of 2012 and in 2013. For 2012, the average MLS® price is forecast to be $265,000 while 2013 will see an increase to $273,300.

• Introduction
• Quebec Real Estate
• Montreal Real Estate