The changing demographics of Greater Montréal are likely to influence the dynamics of the real estate market in ways that could result in slowdown, according to the latest outlook by Canada Mortgage and Housing Corporation (CMHC).
It is expected that household formation in the city will decrease over the next 20 years, hinting at an overall slowdown in residential construction.
"Although total new-home construction is forecast to slow, an aging housing stock should continue to fuel the renovation industry. Despite the expected slowdown in housing starts, residential renovation spending should, therefore, continue to rise and so support the construction industry," said CMHC senior economist Francis Cortellino.
On the other hand, the Montréal's rental housing demand will likely grow in the coming years, driven by older households. This increase in demand will help absorb the surge in rental housing starts recorded last year.
In terms of resale markets, signs of overheating are starting to appear. However, Cortellino said the increase in the number of senior households in Montréal could bring about a rise in the supply of properties for sale and thereby contribute to "tempering market imbalances".
"Looking at the resale market, population aging will play a part in increasing the number of properties listed for sale in the future. In the short term, however, this number will likely be limited. It could, therefore, take a number of years before the effects are felt more concretely," he said.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate