Montreal will experience a strong decline in housing starts in mid-2020, but the decline should be followed by a rebound. Property prices could even exceed their levels before the pandemic of 2022.
It is this that provides the canada mortgage and housing corporation (CMHC) in its special issue on the Prospects of the housing market, just released to the public. This analysis is centered on the major urban centres.
Confidence for Montreal
In Montreal, “even if it may be that the prices have fallen considerably during the next few months, to the extent that the economic and demographic conditions will become more favourable, and prices are expected to follow a slight upward trend by 2022 and may even exceed their levels before the pandemic,” can we read.
Echoing the analysis of the CMHC, the president of the Treasury Board, Jean-Yves Duclos, also said he was convinced that the real estate market rebondirait “fairly quickly” in Montreal. “We had a excellent economic situation before the crisis of the COVID-19, he said. The strength of the quebec economy is strong.”
However, the CMHC stresses that”extreme uncertainty” and “unprecedented” remains as to the precise time and the speed of the recovery. This will depend in particular on the impact of a possible second wave of the pandemic, the evolution of the price of oil, but also of migration flows, which are an important engine of the real estate market.
“The COVID-19 has had an unprecedented impact on the urban centres of Canada. The uncertainty, in the short term, will result in a significant decline in sales and residential construction. As the virus will be neutralized, the cities will recover, but there is a great uncertainty regarding the progress of the recovery and the time it will take place,” says Aled Ab lorwerth, deputy chief economist at CMHC.
For all of Canada, “housing starts will likely decrease of 51% to 75% in 2020, compared to their levels prior to the COVID-19,” said the CMHC. Real estate sales should drop from 19% to 29% this year, and prices will decline from 9% to 18%. The picture is particularly bleak for cities dependent on the energy market, such as Calgary and Edmonton, which were hard hit by the drop in the price of a barrel of oil.