Press review of early October

In this press review of the first half of October, we note the role of the City of Montreal in the context of the Caquist victory in the provincial election, trends in the rate of home ownership and renting over the past decade, and the latest data on property sales.

CAQ victory and the Montreal context

While the boroughs of Montreal have already begun to present increasing budgets, reflecting significant increases in local taxes to come in 2023, the municipal administration wishes to revise its "archaic model" to identify new sources of revenue. The goal, they said, would be to create a countervailing power to the provincial government by ensuring greater financial autonomy. Following the provincial election, the mayor also stated to be able to make its claims heard with the Legault government, particularly with respect to housing and urban sprawl. It states in this article from Journal Métro that the Premier could remain "inflexible" on certain issues, due to his strong position in the northern and southern crowns of the island of Montreal. It should be recalled that Minister Andrée Laforest, responsible for the Department of Municipal Affairs and Housing, is the Caquist candidate with the highest percentage of votes of the 90 members of the same party on election night.

 

Trends in ownership and rental rates

"We can expect rental demand to be driven by tenants who stay in the rental market longer than in the past," says Francis Cortellino, market analyst at the CMHC, as reported in in this article from La Presse. In Canada, the number of renter households grew three times faster than the number of owner households from 2011 to 2021, it says in this Nouvelliste's article.

 

Slowdown in property sales

The Association professionnelle des courtiers immobiliers du Québec (APCIQ) also stated that the month of September resulted in lowest number of property sales in 10 years in Montreal. In the greater Quebec City area, we can read that there is a 15% decrease in home sales compared to the same period in 2021. For plexes in particular, this decrease is 25%. In this article, we could read that the plexes still gained 10% in value compared to September 2021 by settling at a median price of $384,500.

Desjardins produced a report indicating that a rebound in the real estate market is expected in 2024, while the cities that experienced the most extreme increases would experience equally significant corrections in 2023. The same report also suggests that Canada will enter a recession early next year and that governments will need to act to "mitigate the effects of the economic downturn on residential construction".

 

CMHC's National Affordability Goal

In terms of housing starts, the CMHC has indicated that the targets set for the year 2030 (3.5 million additional homes) that would make housing more affordable are unlikely to be met, according to this article from La Presse. In a most optimistic scenario, there would only be a 30 to 50% increase in housing starts in the province of Ontario, notably because of the shortage of construction labour, and a demographic and price pressure that is very strong. Among these forecasts established by the CMHC, Quebec and British Columbia