The vacancy rate will depend heavily on migration

In a special report on Canada's major urban centers released on June 23, the CMHC predicts that the vacancy rate in the Montreal area "will begin to ease", in other words, that it will rise again if the migratory balance drops drastically. Otherwise, the Montreal vacancy rate should remain below 2%.

10,000 new dwellings are expected to be built in the Montreal area in 2020, a record. These projects are sufficiently advanced to see the light of day. In addition, there will be units that will go from the short-term rental market to the long-term residential market.

Another factor to consider, some renters should remain in the rental market, since the negative impacts of the crisis on employment and income will affect the confidence of tenants that were planning to become owners. However, the persistence of low mortgage rates could support access to home ownership.

Less demand will slow prices

Demand for the purchase of a property is expected to be less sustained. Prior to the pandemic, few homes were available for resale, which "created market conditions strongly in favour of sellers" and pushed prices up.

The CMHC expects that although prices may decline significantly in the coming months, they should still follow a slight upward trend by 2022 as economic and demographic conditions become more favorable. They may even exceed their pre-pandemic levels.

Thus, the average Centris® price of a home in the Montréal area, which was $408,401 in 2019, could be in a range between -1 to +3.5% in 2020. In 2021, the price level should be between -4 to +4%. Finally, housing prices in the Montréal area in 2022 could be between -2.5 and 8%, again in comparison with 2019.