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Outlook rosy for Montreal real estate


By Lynn Moore, The Gazette

November 18, 2009 9:43 PM


Indicators point to a robust real estate market in 2010 in the Montreal region, according to a Canada Mortgage and Housing Corp. outlook released yesterday.


While lower prices for homes and condos are still luring people to the suburbs and outlying areas, interest in Montreal Island properties, particularly downtown condominiums and multiplex units is high, according to CMHC analysts. And a lower vacancy rate will tighten the rental market.


"In 2009, a weaker economic environment, combined with increased supply of homes in certain market segments, lowered housing construction in Quebec. In 2010, a recovering economy, still favourable borrowing environment and a tighter resale market will translate into sustained new home construction," Kevin Hughes, senior economist at CMHC, told about 1,000 industry professionals in Montreal yesterday.


About 43,000 housing starts are expected in the province in 2010, according to the CHMC outlook. Sales of existing homes will surpass the 78,000 mark next year.


In the Montreal area, 40,500 properties will change hands in 2010 and the average prices will rise by about 3 per cent to $279,000, according to the outlook.


Condominiums, which now account for nearly six out of 10 housing starts on the Island of Montreal, continue to gain a foothold in the suburbs, particularly on the South Shore.


Construction of single-detached homes will rise by 6 per cent in 2010, while new multi-family housing units will fall by 3.8 per cent. But construction in the retirement home segment, should slow down in 2010, as this market is facing a drop in demand following years of intense building, Bertrand Recher, CMHC's senior market analyst, said.


"While the annual starts volumes (of all dwellings) surpassed the 20,000-unit mark in the last seven years, meeting a latent demand that had not been expressed at the end of the 1990s, the starts level forecast for 2010 will be more in line with the rate of household formation in the Montreal area," Recher said.


The vacancy rate in the Montreal region will decrease to 2.1 per cent this year, from 2.4 per cent in the fall of 2008. It should return to 2.4 per cent in 2010, supported by an increase in immigrants in Montreal.


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