In this last half of November, our press review looks at the federal government's latest announcement on financial assistance for housing, the situation on home sales and housing starts that are declining, and the rising vacancy rate and falling homeownership rate.
Offer of financial assistance to tenants
CORPIQ has relayed some very pertinent information to its members and landlords regarding a government financial assistance program for tenants. As reported in La Presse, the federal government will provide a one-time tax-free payment of $500 to eligible individuals. For the more vulnerable tenants, they are invited to complete an application form and verify their eligibility on this Government of Canada page. The Société d'habitation du Québec also offers a program for more economically vulnerable tenants. Depending on different criteria, a household can receive $100, $150 or $170 per month since the beginning of October, as mentioned in this article.
Property sales and housing starts
Residential sales rose slightly in October, reports La Presse. This is the first increase since last February. L’Association canadienne en immobilier noted a 2.2% increase in new listings in October compared to September across the country. However, prices are still down on the other hand.
In terms of residential construction starts, a decrease was reported across the country. As reported by La Presse, a 13% decrease in multi-family housing starts was noted, reaching 188,189 units in the major urban centers. There is even talk of a probable deterioration of the situation for 2023 in the Journal de Montréal. Financing costs continue to rise due to the sharp increase in interest rates, material costs, labour costs and delays in the supply chain. As a result, 13,000 fewer housing starts are expected in the coming year, it says.
Vacancy and ownership rates
On the Radio-Canada website, a report states that the vacancy rate for all office space has doubled since 2020 to 18%, and the rate could continue to rise. According to one commercial real estate broker, companies are downsizing to smaller, higher quality space to attract employees to the office.
With respect to homeownership in Canada, it is declining, as reported in this article from Les Affaires. The homeownership rate in Quebec drops from 61.3% in 2016 to 59.9% in 2021 and is below the Canadian average of 66.5%. This is the first decline in the province since data collection began in 1971. This also reflects the fact that a large portion of the construction carried out over the past five years has been for rental units, 40.4% of which were built in Quebec as mentionned in Journal Métro, this is the highest statistic since the post-war era in the 1960s. Furthermore, according to the President and CEO of Desjardins Group, housing affordability should be a priority. In this article from Le Soleil, he mentions that the acquisition of a property makes it possible to create a patrimony with an asset that increases in value, whereas it is becoming very difficult for people under 40 years old to claim such a project.