In-Depth Housing Analysis for Canada, the Provinces, and Nine Metropolitan Areas.

In-Depth Housing Analysis for Canada, the Provinces, and Nine Metropolitan Areas. metropolitan housing outlook Autumn 2013

Metropolitan Housing Outlook: In-Depth Housing Analysis for Canada, the Provinces, and Nine Metropolitan Areas by Alan Arcand, Mario Lefebvre, Jane McIntyre, Greg Sutherland, and Robin Wiebe About The Conference Board of Canada We are: The foremost independent, not-for-profit, applied research organization in Canada. Objective and non-partisan. We do not lobby for specific interests. Funded exclusively through the fees we charge for services to the private and public sectors. Experts in running conferences but also at conducting, publishing, and disseminating research; helping people network; developing individual leadership skills; and building organizational capacity. Specialists in economic trends, as well as organizational performance and public policy issues. Not a government department or agency, although we are often hired to provide services for all levels of government. Independent from, but affiliated with, The Conference Board, Inc. of New York, which serves nearly 2,000 companies in 60 nations and has offices in Brussels and Hong Kong. Publication 14-190 2013 * Published in Canada All rights reserved Agreement No. 40063028 *Incorporated as AERIC Inc. and the torch logo are registered trademarks of The Conference Board, Inc. Forecasts and research often involve numerous assumptions and data sources, and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice. Genworth MI Canada Inc. Genworth MI Canada Inc., through its subsidiary, Genworth Financial Mortgage Insurance Company Canada, has been the leading Canadian private residential mortgage insurer since 1995. Known as Genworth Canada, The Homeownership Company, it provides default mortgage insurance to Canadian residential mortgage lenders that enables low-down-payment borrowers to own a home more affordably and stay in their homes during difficult financial times. Genworth Canada combines technological and service excellence with risk management expertise to deliver innovation to the mortgage marketplace. As at September 30, 2013, Genworth Canada, had $5.6 billion in total assets and $3.0 billion in shareholders equity. Based in Oakville, Ontario, Genworth Canada employs approximately 260 people across Canada. Find out more at www.genworth.ca. Preface This report provides an in-depth analysis of the housing market at the national, provincial, and metropolitan levels. Covering a wide range of housing market statistics, such as interest rates, housing starts, mortgage approvals, and home prices, this report connects the economy with housing market activity. It also provides insights into the financial situation of consumers. Nine census metropolitan areas are covered: Québec City, Montréal, Toronto, Ottawa Gatineau, Winnipeg, Calgary, Edmonton, Vancouver, and Victoria. Provincial coverage includes the Atlantic provinces, Quebec, Ontario, the Prairies, Alberta, and British Columbia. This report is completed twice a year.

Contents What Has Changed?... 1 Executive Summary...2 National Overview...7 Provincial Overview...12 Atlantic Canada... 12 Quebec... 15 Ontario... 18 Prairies... 21 Alberta... 24 British Columbia... 27 Metropolitan Overview...30 Québec City... 30 Montréal.... 34 Toronto.... 38 Ottawa Gatineau... 42 Winnipeg... 46 Calgary.... 50 Edmonton.... 54 Vancouver... 58 Victoria.... 62 Definition and Concepts...66

What Has Changed? The forecast for Canada s real gross domestic product is relatively unchanged from our spring 2013 Metropolitan Housing Outlook, as the main assumptions supporting the outlook seem to be holding up. Growth in Canada s real GDP is expected to be 1.8 per cent in 2013 a second consecutive year of tepid growth. However, housing markets have strengthened in some regions over the past couple of months, and consumer and business confidence has picked up. As a result, the Canadian economy is expected to perform better in 2014, expanding by 2.4 per cent. This is still a 0.1 percentage point downward revision from six months ago when we completed the previous housing outlook publication. The Canadian dollar lost ground this past summer, pulled down, in part, by weaker commodity prices, including heavily discounted crude oil. The loonie is expected to average US$0.97 this year, much lower than the US$1.02 forecast in the previous housing outlook. Despite some pickup in the economy in the coming months, the Canadian dollar is expected to slip to US$0.96 for 2014, a 7-cent drop from the last housing outlook publication. Modest economic growth and tighter mortgage rules lowered demand in Canada s new housing market in the first half of this year. Accordingly, builders are expected to reduce housing starts by 15.5 per cent in total for 2013, down to 181,400 units. This is an 800-unit reduction from the previous Metropolitan Housing Outlook. However, demand has already improved in some markets, and so modest growth of 1.9 per cent is anticipated for housing starts next year. In level terms, housing starts are expected to be 184,900 units in 2014, up from 184,500 units in the last publication. Weaker demand in the Canadian housing market in the past few months has also slowed price growth in the new home market. The current outlook forecasts new home prices will rise by 1.8 per cent this year and 2 per cent in 2014. This is down from the 2.1 per cent and 2.5 per cent increases anticipated six months ago. Meanwhile, resale prices have been stronger so far in 2013. Existing home prices are now expected to increase 3.1 per cent this year, up from the 0.9 per cent increase expected in the previous outlook. Resale price growth will be more moderate next year, however, at 1.7 per cent, down from the 3.3 per cent forecast previously. The number of mortgage approvals is also expected to be lower in 2013, slipping 2.3 per cent, the second annual decline in a row. This is a more pronounced drop than the 1.1 per cent decline expected six months ago. Next year, with housing markets improving, total mortgage approvals are anticipated to grow by 2.9 per cent, an upward revision from the 1.7 per cent expected in the previous forecast.

Executive Summary National Overview Canada s economic prospects seem to be brightening: housing markets remain decent, consumer and business confidence has picked up, and the U.S. economy is improving. Accordingly, Canada s real GDP is forecast to advance by 2.4 per cent in 2014, following 1.8 per cent growth this year. Employment growth is also forecast to pick up from 1.3 per cent this year to 1.4 per cent in 2014, cutting the unemployment rate from 7.2 per cent to 7 per cent. Financial markets have calmed recently. While the European sovereign debt crisis still lurks, the eurozone has emerged from crisis mode. The U.S. Federal Reserve continues its policy of quantitative easing, and the Bank of Canada has said interest rates will stay low as long as Canada s economy remains weak and inflation is dormant. On the currency front, the Canadian dollar is still below par with its U.S. counterpart, largely a result of the global flight to the safe haven of the U.S. dollar. Meanwhile, mortgage interest rates are on the rise as yields on bonds, from which mortgages are funded, increase. Accordingly, we expect the posted three-year conventional mortgage rate to increase gradually from 3.8 per cent in 2013 to 4.4 per cent in 2014 and 5.1 per cent in 2015. This, along with ongoing employment gains, should allow indebted households to adapt gradually to the resulting higher mortgage payments. There is little sign of current mortgage stress; default rates are low. Canadian housing markets remain generally solid, despite repeated attempts to cool them by tightening mortgage insurance rules. Housing starts dipped to 175,500 units at an annual rate during the first quarter of 2013, but quickly rebounded to 185,500 units in the second quarter. We expect starts to end the year at 181,400 units. For next year, we expect nearly 185,000 starts. New home price growth will remain subdued at 1.8 per cent this year and 2 per cent in 2014, down from gains of 2.2 2.4 per cent between 2010 and 2012. The national housing market does not seem out of balance with demographic requirements. Canada s ratio of housing starts to absolute population changes has averaged 0.54 over the past 25 years and has been near that each of the past three years. Meanwhile, the national average existing home price, which increased by a marginal 0.2 per cent in 2012, is forecast to rise 3.1 per cent to $372,770 this year and 1.7 per cent in 2014. In short, Canadian housing markets should land softly. The economy continues to advance modestly. Interest rates, although rising, remain low. Recent homebuyers have locked in low mortgage rates and will have paid off a relatively large share of their debt when they have to renegotiate. New construction does not appear out of line with demographic requirements, even in Toronto, where concern over inflated condominium supplies abounds. A crash would require a significant negative surprise like an interest rate spike or employment collapse. Since none of this is in the cards, a housing crash like the one in the U.S. is nowhere near a possibility. Provincial Overview Stronger performance by British Columbia s goods-producing industries will lift GDP expansion to 3 per cent in 2014, following a disappointing 1.5 per cent in 2013. This will produce only 0.3 per cent job growth in 2013 but a stronger 1.7 per cent in 2014. Housing markets are improving in Vancouver and Victoria, although a subdued Chinese economy could cool offshore demand for provincial real estate. Housing starts are nonetheless forecast to decline 8 per cent in 2013, and then jump over 10 per cent in 2014. Little change is expected in prices for both new and existing homes in 2013 and 2014, after both dropped in 2012. Alberta has largely shrugged off the effect of the June floods, thanks to decent energy sector activity. Provincial GDP is forecast to rise 3.2 per cent in 2013 and 3 per cent in 2014. This will lift employment 2.2 per cent in 2013 and 2 per cent in 2014. Housing starts are predicted to rise 4.3 per cent in 2013, building on a 30 per cent jump in 2012. They should essentially stabilize in 2014. We

Autumn 2013 Metropolitan Housing Outlook 3 expect the average sale price of an existing home to rise 4.5 per cent in both 2013 and 2014; new home price growth should be closer to 3 per cent in both years. Healthy GDP growth of 2.5 per cent is forecast in 2013 for Manitoba and Saskatchewan combined and then 2.3 per cent in 2014. This will foster job growth of 2.2 per cent in 2013 and 1.6 per cent in 2014. Economic momentum will largely come from Saskatchewan s goods-producing sector, since Manitoba s metal mining and services sectors are expected to be weak. Housing starts soared 31 per cent in the two provinces combined in 2012, but should drop 19 per cent in 2013 this year. But construction volumes will remain very strong, in line with continued sound population growth, and a small 4.4 per cent rebound is expected for 2014. The average resale home price will increase 5.3 per cent in 2013 and 4.7 per cent in 2014, while new home prices will rise 3.3 per cent and 3.2 per cent. Continued manufacturing struggles in 2013 will limit Ontario s GDP growth to 1.2 per cent, but next year will see manufacturing improve and GDP advance 2.2 per cent. Employment is forecast to rise 1.3 per cent in 2013 and 1.6 per cent in 2014. Housing starts are on track to fall 21 per cent this year, led by a big drop in multi-family starts. For 2014, we see both single and multiple construction stabilizing, with total starts rising by 2.5 per cent. Average existing home price growth is forecast to slow to 2.8 per cent in 2013 and 1.6 per cent in 2014. Moderate new home price advances are forecast: 3 per cent this year and 1.8 per cent in 2014. Quebec s GDP is forecast to rise only 1.4 per cent this year but a stronger 2.2 per cent in 2014. Still, employment will grow 1.4 per cent this year and 1.1 per cent next. Significant declines in both single-detached and multi-family construction are forecast to cut total housing starts by 24 per cent in 2013, the third consecutive annual decline. Next year is forecast to see both single and multiple starts stabilize. House price growth will be modest: 1 per cent this year and 2.7 per cent in 2014 for existing homes and advances of 1.4 per cent and 1.9 per cent for new units. Canada s four Atlantic provinces will see their combined GDP grow 2.3 per cent in 2013, following a 1.5 per cent contraction in 2012. A 1.9 per cent expansion is on tap for 2014. Employment advances will remain sluggish at 0.5 per cent in 2013 and 0.6 per cent in 2014. Housing markets are similarly weak. This year, we expect double-digit percentage drops in both singledetached and multi-family construction to cut total starts by 13.4 per cent. Another 11 per cent drop is on tap for 2014, as multiples retrench further. The average existing home price is forecast to dip 1.5 per cent this year, but rise 2.9 per cent in 2014. The average new home price is forecast to rise 3.6 per cent this year and 1.7 per cent in 2014. Municipal Overview Most cities are forecast to see somewhat slower GDP growth in 2013 than in 2012. Victoria s 0.1 per cent GDP expansion (down from an already-low 0.3 per cent in 2012) is predicted to be the slowest among our cities. Edmonton is forecast to be this year s leader, although its GDP growth of 4.2 per cent will be a cooling from hikes near or above 6 per cent in the previous three years. For 2014, we expect growth will accelerate in all cities except Edmonton, where it will slow to a stillstrong 3.2 per cent. Calgary s 3.4 per cent will be next year s fastest advance, while Ottawa s 1.6 per cent will be the slowest, as the city grapples with ongoing federal restraint. Unsurprisingly, the Alberta cities are the only two cities where GDP growth is expected to average at least 3 per cent per year between 2015 and 2017. By contrast, we think Québec City s GDP expansion will average only 2 per cent. For the second consecutive year, sales of existing homes are forecast to drop everywhere except the Alberta cites in 2013. In the case of Calgary and Edmonton, sales growth, while positive this year, will slow from the previous year s pace. The most notable news elsewhere is the apparent end of Vancouver s market correction. Sales rose briskly during the second quarter of 2013 and exceeded their year-earlier volume for the first time since the third quarter of 2011. Nonetheless, sales will still end 2013 down 2.3 per cent. Sales in Toronto are also expected to post their second straight annual dip. This year s largest forecast drops are in the province of Quebec 10 per cent in Québec City and 8 per cent in Montréal. For 2014, we think sales will rise everywhere except Ottawa, which will suffer a fifth straight annual

4 Metropolitan Housing Outlook Autumn 2013 sale decline. Increases will be modest elsewhere, with a 3 per cent gain in Winnipeg leading the pack. Between 2015 and 2017, sales will rise at an annual average rate of roughly 2 to 3 per cent in most places except Toronto, where growth will be slightly faster. Quarterly sales-to-new-listings ratio data indicate balanced markets in most cities, although the more volatile monthly data show Calgary has edged into a sellers position and Québec City has dipped into buyers territory. Measured by annual data, though, we expect balanced markets everywhere in 2013. Still, the sales-to-newlistings ratio will fall in our five easternmost cities, led by a 7 percentage point drop in Québec City. Vancouver and Victoria will see 6 and 7 percentage point increases respectively. For 2014, we expect the ratio to advance in five cities, the largest gain being another 6 percentage point rise in Vancouver. Little movement in most cities sales-to-new-listings ratio is expected between 2015 and 2017. A 2 percentage point increase in Montréal and a similar decline in Winnipeg are the only two changes greater than 1 per cent. The average resale price is poised to rise in all cities in 2013 for the first time since 2010. Last year, the average resale price fell in Vancouver and Victoria. This year, prices are forecast to inch higher in both these cities, but still at the slowest pace among our nine areas. Unsurprisingly, we expect Calgary will enjoy the fastest price growth in 2013, at 4.7 per cent. For 2014, we think price growth will remain the strongest in Alberta, with prices forecast to rise 4.6 per cent in both Calgary and Edmonton. But price advances will remain below 2 per cent in both B.C. cities, which are again forecast to have our nine cities slowest price growth. Between 2015 and 2017, price gains will be the strongest in Calgary, Edmonton, and Winnipeg, which are all forecast to see advances average at least 4 per cent annually. Widespread pullbacks in housing starts are expected in 2013. Especially large drops are forecast for our eastern cities; Montréal, Toronto, and Québec City are all expected to see starts decline near 30 per cent, while starts are forecast to fall 21 per cent in Ottawa. Only Edmonton and Winnipeg are forecast to see increases, and these will both be less than 10 per cent. Another uneven year is expected in 2014, with starts forecast to drop in five cities, led by a 16 per cent decline in Edmonton. Between 2015 and 2017, we see the fastest starts growth in Toronto and Winnipeg. During the past five years, more multi-family units than single-detached homes were built in six of our nine cities; multiples share was over 70 per cent in Québec City, Montréal, Toronto, and Vancouver. This proliferation of multifamily units is expected to increase, particularly in former single-family bastions like Calgary, Edmonton, and Winnipeg. Vancouver will continue to see the lowest share of single-detached units; these are forecast to make up only 20 per cent of starts between 2013 and 2017. Low and easing interest rates following the 2009 recession have contained increases in average principle and interest payments in most cities, despite rising house prices. Indeed, these payments were lower in 2013 than in 2008 in Calgary, Edmonton, and Victoria and rose only 5 to 6 per cent in Montréal, Ottawa, and Vancouver. But carrying costs did rise in double-digit terms in Toronto, Québec City, and Winnipeg. Rising mortgage interest rates in 2014 are predicted to lift average monthly mortgage payments moderately in all cities; the largest jump will be 4.8 per cent in Calgary and Edmonton. Vancouver remains our least affordable city, both absolutely and measured against local incomes. Monthly principle and interest payments in Vancouver are projected to average $4,030 in 2014 and consume 41 per cent of average household income. No other city approaches these levels. Financial Indicators (Canada) 2012 2013f 2014f Exchange rate (U.S./Can.) 1.00 0.97 0.96 Inflation rate 1.5 1.1 1.9 Bank rate 1.3 1.2 1.5 One-year mortgage rate 3.2 3.1 3.7 Three-year mortgage rate 3.9 3.8 4.4 Five-year mortgage rate 5.3 5.2 5.3 Federal bonds: 1 3 years 1.1 1.2 1.5 Federal bonds: 7 years 1.5 2.0 2.3 Federal bonds: long term 2.4 2.9 3.0 Sources: Bank of Canada; Canada Mortgage and Housing Corporation; Canadian Real Estate Association; Statistics Canada;.

Autumn 2013 Metropolitan Housing Outlook 5 Economic Indicators GDP (2002 $ millions) Employment (000s) Unemployment Rate Personal Income per Capita Retail Sales ($ millions) 2012 2013f 2014f 2012 2013f 2014f 2012 2013f 2014f 2012 2013f 2014f 2012 2013f 2014f Canada 1,661,559 1,690,671 1,730,882 17,510 17,736 17,986 7.3 7.2 7.0 34,136 35,028 36,018 468,252 483,438 501,819 1.7 1.8 2.4 1.2 1.3 1.4 3.4 2.6 2.8 2.6 3.2 3.8 Atlantic provinces 89,660 91,706 93,415 1,110 1,115 1,122 10.3 10.3 9.8 35,323 36,316 37,290 34,449 35,119 36,174 1.5 2.3 1.9 0.7 0.5 0.6 3.2 2.8 2.7 1.4 1.9 3.0 Quebec 303,322 307,656 314,389 3,985 4,042 4,085 7.8 7.7 7.6 35,921 36,486 37,449 103,648 105,551 109,222 1.0 1.4 2.2 0.8 1.4 1.1 3.1 1.6 2.6 1.1 1.8 3.5 Québec City 32,661 33,085 33,811 421 424 433 5.1 4.6 4.6 39,223 40,216 41,347 12,413 12,685 13,064 1.2 1.3 2.2 0.5 0.8 2.0 3.9 2.5 2.8 2.1 2.2 3.0 Montréal 158,778 160,851 164,287 1,979 2,018 2,031 8.5 8.0 7.9 36,250 37,320 38,118 45,993 48,466 50,126 1.1 1.3 2.1 1.4 2.0 0.6 3.6 3.0 2.1 1.7 5.4 3.4 Ontario 574,469 581,252 594,144 6,786 6,874 6,982 7.9 7.7 7.6 38,810 39,681 40,887 165,177 166,624 173,391 1.4 1.2 2.2 0.8 1.3 1.6 2.3 2.2 3.0 1.6 0.9 4.1 Ottawa 62,532 63,015 64,025 712 699 710 6.3 6.4 6.1 45,137 44,816 46,226 17,379 17,470 18,072 0.8 0.8 1.6 2.5 1.8 1.6 3.1 0.7 3.1 2.8 0.5 3.4 Toronto 284,318 288,915 296,856 3,007 3,084 3,134 8.5 8.2 8.0 40,055 41,252 42,274 67,669 68,348 70,794 1.9 1.6 2.7 1.6 2.5 1.6 3.4 3.0 2.5 1.0 1.0 3.6 Prairies 106,366 109,063 111,582 1,167 1,192 1,212 5.1 4.7 4.6 38,399 39,571 40,617 34,766 35,404 36,901 2.4 2.5 2.3 1.5 2.2 1.6 3.7 3.1 2.6 4.6 1.8 4.2 Winnipeg 33,144 33,604 34,310 417 420 426 5.6 5.9 5.5 37,231 38,004 39,078 10,360 10,669 11,157 1.5 1.4 2.1 2.1 0.7 1.5 3.2 2.1 2.8 1.8 3.0 4.6 Alberta 276,908 285,644 294,226 2,149 2,196 2,240 4.6 4.7 4.7 51,768 53,516 54,852 68,452 73,057 76,462 3.9 3.2 3.0 2.6 2.2 2.0 5.6 3.4 2.5 6.9 6.7 4.7 Calgary 105,987 109,485 113,164 752 770 792 4.8 4.9 4.6 55,524 56,602 58,176 24,164 25,224 26,531 4.3 3.3 3.4 3.7 2.4 2.8 1.5 1.9 2.8 3.6 4.4 5.2 Edmonton 78,082 81,384 83,989 693 710 722 4.7 4.5 4.6 49,110 50,187 51,225 22,467 23,659 24,841 5.9 4.2 3.2 3.3 2.5 1.6 2.8 2.2 2.1 4.5 5.3 5.0 British Columbia 191,749 194,568 200,473 2,313 2,320 2,360 6.8 6.5 6.2 37,742 38,704 39,810 61,565 62,170 64,477 1.7 1.5 3.0 1.6 0.3 1.7 3.2 2.5 2.9 1.9 1.0 3.7 Vancouver 108,038 110,428 113,872 1,275 1,281 1,313 6.7 6.5 6.2 38,711 39,207 40,494 28,628 28,963 30,074 2.6 2.2 3.1 1.9 0.5 2.5 3.5 1.3 3.3 3.4 1.2 3.8 Victoria 14,976 14,995 15,318 186 184 185 5.5 5.6 5.2 40,656 41,167 42,169 4,183 4,159 4,280 0.3 0.1 2.2 2.2 1.2 0.7 3.1 1.3 2.4 1.2 0.6 2.9 Sources: Bank of Canada; Canadian Real Estate Association; Statistics Canada;.

6 Metropolitan Housing Outlook Autumn 2013 Demographic and Housing Indicators Population (000s) Housing Starts Housing Completions Existing Home Prices New Home Prices 2012 2013f 2014f 2012 2013f 2014f 2012 2013f 2014f 2012 2013f 2014f 2012 2013f 2014f Canada 34,827 35,193 35,586 214,827 181,446 184,927 180,646 188,966 177,776 361,494 372,769 379,236 413,730 421,284 429,782 1.1 1.1 1.1 10.8 15.5 1.9 3.0 4.6 5.9 0.2 3.1 1.7 2.3 1.8 2.0 Atlantic provinces 2,363 2,361 2,366 12,647 10,950 9,734 11,699 11,352 10,109 142,756 140,607 144,668 339,660 351,763 357,729 0.1 0.1 0.2 1.0 13.4 11.1 2.8 3.0 11.0 1.0 1.5 2.9 2.3 3.6 1.7 Quebec 8,043 8,109 8,173 47,367 36,220 36,395 44,564 42,758 37,309 272,014 274,868 282,264 304,180 308,506 314,380 0.9 0.8 0.8 2.1 23.5 0.5 0.1 4.1 12.7 4.1 1.0 2.7 1.5 1.4 1.9 Québec City 770 777 784 6,262 4,386 4,134 5,518 4,881 4,007 256,196 267,821 274,743 232,176 235,387 239,898 1.1 1.0 0.9 12.6 30.0 5.8 2.6 11.5 17.9 5.0 4.5 2.6 2.9 1.4 1.9 Montréal 3,958 3,996 4,037 20,420 14,376 15,392 19,092 17,110 14,883 318,244 323,253 331,303 325,459 330,350 336,949 1.0 1.0 1.0 9.9 29.6 7.1 3.9 10.4 13.0 3.5 1.6 2.5 1.4 1.5 2.0 Ontario 13,489 13,606 13,755 76,742 60,326 61,805 58,613 63,886 60,512 381,328 392,017 398,171 517,813 533,304 542,869 1.0 0.9 1.1 13.2 21.4 2.5 3.3 9.0 5.3 5.0 2.8 1.6 4.7 3.0 1.8 Ottawa 1,273 1,286 1,294 8,873 7,034 6,225 8,122 6,838 6,631 329,150 333,746 339,771 404,027 408,564 416,644 1.4 1.0 0.7 6.3 20.7 11.5 2.8 15.8 3.0 2.5 1.4 1.8 2.6 1.1 2.0 Toronto 5,941 6,042 6,147 48,368 34,133 38,717 31,907 36,403 38,748 520,663 533,035 543,456 605,473 620,137 631,169 1.7 1.7 1.7 21.7 29.4 13.4 5.7 14.1 6.4 7.5 2.4 2.0 5.1 2.4 1.8 Prairies 2,342 2,378 2,417 17,210 13,870 14,477 12,869 14,715 13,513 260,308 274,070 286,990 397,470 410,659 423,780 1.6 1.5 1.7 31.2 19.4 4.4 6.6 14.3 8.2 5.5 5.3 4.7 3.2 3.3 3.2 Winnipeg 778 789 798 4,025 4,304 3,953 3,258 3,891 3,933 255,080 263,529 273,446 432,930 449,458 458,249 1.6 1.3 1.2 20.5 6.9 8.2 2.5 19.4 1.1 5.7 3.3 3.8 4.2 3.8 2.0 Alberta 3,860 3,973 4,051 33,396 34,823 34,698 26,446 31,811 31,701 361,969 378,376 395,376 435,951 447,813 462,468 2.4 2.9 2.0 29.9 4.3 0.4 8.9 20.3 0.3 2.6 4.5 4.5 1.1 2.7 3.3 Calgary 1,309 1,350 1,378 13,186 12,834 13,444 9,593 12,129 12,912 412,315 431,760 451,798 490,128 509,415 526,002 3.2 3.1 2.1 43.5 2.7 4.8 24.8 26.4 6.5 2.3 4.7 4.6 1.7 3.9 3.3 Edmonton 1,230 1,264 1,289 12,758 14,006 11,734 10,166 13,114 12,442 334,300 346,581 362,609 382,809 387,803 399,334 2.8 2.8 1.9 38.3 9.8 16.2 13.7 29.0 5.1 2.7 3.7 4.6 0.9 1.3 3.0 British Columbia 4,618 4,657 4,712 27,465 25,257 27,819 26,380 25,564 25,425 512,974 516,753 529,046 634,715 634,714 644,990 1.0 0.9 1.2 4.0 8.0 10.1 17.0 3.1 0.5 7.9 0.7 2.4 0.4 0.0 1.6 Vancouver 2,464 2,501 2,541 19,071 17,357 16,536 16,958 18,073 17,339 730,063 737,162 750,861 662,097 662,452 674,797 1.5 1.5 1.6 6.7 9.0 4.7 31.3 6.6 4.1 6.4 1.0 1.9 0.5 0.1 1.9 Victoria 363 365 367 1,663 1,347 1,465 1,591 1,610 1,434 484,164 486,225 492,802 400,585 397,915 403,822 0.4 0.4 0.6 1.9 19.0 8.7 3.1 1.2 10.9 2.8 0.4 1.4 2.8 0.7 1.5 Sources: CMHC Housing Time Series Database; Canadian Real Estate Association; Quebec Federation of Real Estate Boards; Statistics Canada;.

Autumn 2013 Metropolitan Housing Outlook 7 Canada Housing Starts (000s) Singles Multiples 20-year average 250 200 150 100 50 0 2010 11 12 13f 14f 15f 16f 17f Sources: ; CMHC Housing Time Series Database. Canada s economy is again expected to grow by a modest 1.8 per cent this year, but increase to 2.4 per cent growth in 2014 thanks to the improving U.S. economy next year. A slower resale housing market and tighter mortgage rules discouraged builders in the new home market through the last half of 2012 and into the first quarter of 2013. Although starts have picked up again in recent months, the outlook calls for total housing starts to decline 15.5 per cent this year and grow by just 1.9 per cent next year. Economic Outlook House Price Growth (percentage chage) 8 6 4 2 0 New Resale 2010 11 12 13f 14f 15f 16f 17f Sources: ; CMHC Housing Time Series Database; Canadian Real Estate Association; Quebec Federation of Real Estate Boards. Canada s real gross domestic product is set to grow by 1.8 per cent in 2013. For much of the first half of 2013, economic indicators provided few encouraging signs. But through the summer, consumer and business confidence picked up and the U.S. economy gained some speed. Indeed, stronger business investment is expected to help Canada s economic growth advance at a reasonable pace (above 2 per cent) through the second half of this year, leading to a 2.4 per cent forecast increase in real GDP for 2014. However, hiring will remain muted. And, while tight labour markets (especially in Saskatchewan and Alberta) and subdued inflation will help lift households purchasing power, real consumer spending will not outpace income as households try to reduce their debt burdens and increase savings. Public sector spending will also remain muted this year and next. Provincial and federal governments are both targeting balanced budgets, some sooner than others, resulting in very little contribution to economic growth. Still, some provinces have avoided cutting back on much-needed infrastructure, and most provinces are accommodating modest budgetary increases to health care spending. Thus, the brunt of the public sector cuts in 2013 14 will be felt in public administration, education, and social programs.

8 Metropolitan Housing Outlook Autumn 2013 Financial Markets Outlook The U.S. Federal Reserve has reiterated that the current pace of quantitative easing through major bond purchases will continue until the unemployment rate falls below 7 per cent, and that interest rates will remain essentially at zero until even later, when the unemployment rate falls to below 6.5 per cent. Equity markets have been appeased, recovering from an early summer dive and stabilizing. At the same time, given that the Canadian economy is not yet at full capacity and that near-term growth may be choppy, the Bank of Canada has indicated that monetary conditions will remain loose until economic growth strengthens or inflation starts to accelerate. We expect the Bank of Canada will likely start raising rates gradually by mid-2014, well ahead of the U.S., largely because the gap between the economic potential and the current output level is significantly smaller in Canada than in the United States. Therefore, as economic conditions improve south of the border, excess capacity in Canada will be eaten up more quickly. Over the past few months, the loonie has lost ground vis-à-vis the greenback. In part, the swoon in the Canadian dollar from above parity in February to below US$0.95 in July was the result of softer commodity prices, especially heavily discounted Western Canadian Select crude oil. But it was also about the strength in the U.S. dollar, as Canada s currency remained steady in comparison with many other currencies. Federal Reserve statements about possibly easing the pace of bond purchases in its quantitative easing program made global financial and equity markets nervous and pushed up the value of the U.S. dollar. Overall, the Canadian dollar is expected to average US$0.97 this year and US$0.96 in 2014. Housing Outlook Canada s new home market capped an impressive three-year run of growth last year. From 2010 to 2012, a recovering economy and low interest rates drove demand for new homes, as builders increased starts by an average of 13.4 per cent per year, up to 214,800 units in 2012 back above 200,000 units for Mortgage Approval Growth (dollar volume percentage change) 15 10 5 0 5 10 15 Sources: ; Genworth MI Canada; CMHC Housing Time Series Database. Household Net Worth (as a per cent of disposable income) 700 650 600 550 Conventional High-ratio 2010 11 12 13f 14f 15f 16f 17f 500 1998 00 02 04 06 08 10 12 Sources: ; Statistics Canada. the first time since 2008. Growth in multiple-unit starts was particularly strong over the past two years, thanks to a wave of condominium development across the country. But new home price growth remained modest, at an annual average of 2.3 per cent. Average annual growth in existing home prices was a much stronger 6.7 per cent in 2010 and 2011, but fell to just 0.2 per cent last year, signalling a slower resale market. While housing starts rose nearly 11 per cent in total last year, developers began to curtail new home construction in the second half of the year. The new home market was feeling the effects of the federal government s decision to limit rising household debt by steadily lowering the qualifying period for insured mortgages from 40 years in 2008 to just 25 years by mid-2012, making it difficult for some first-time homebuyers to enter the market. With economic growth tepid, builders continued to reduce housing starts through the first quarter of 2013. Starts then increased once again in the second quarter

Autumn 2013 Metropolitan Housing Outlook 9 of this year. In part, builders were lured back to the market by rising sales of existing homes and prices in the first months of 2013. Still, the Canadian housing market is expected to stay cool this year and next. Following the recent run-up in multiple starts in a number of urban centres, a significant number of new units will become available over coming months, helping to keep some builders at bay. Overall, housing starts are forecast to fall by 15.5 per cent to 181,400 units in 2013 and increase by a modest 1.9 per cent to 184,900 units in 2014. New home price growth is expected to remain around 2 per cent this year and next. Meanwhile, resale home prices are set to rise 3.1 per cent in 2013, because of stronger gains at the beginning of this year, and a much more moderate 1.7 per cent next year. Looking ahead, there is room for more growth in the new home market. In general, even with the significant growth in housing starts since 2010, they are still in line with demographic requirements. Over the past 20 years on average, 0.47 homes have been started per additional person in Canada s population. During the past three years, this ratio has been 0.46 well within historical norms. By 2015, better employment gains will also reignite demand despite the gradual rise in interest Consumer Finances (left, per cent; right, per 1 million people) Atlantic Provinces Quebec 0.7 Mortgages in arrears Bankruptcies 250 0.9 Mortgages in arrears Bankruptcies 400 0.6 200 0.7 350 0.5 150 0.5 300 0.4 100 0.3 250 0.3 1998 00 02 04 06 08 10 12 50 0.1 1998 00 02 04 06 08 10 12 200 Ontario Prairie Provinces 0.7 0.6 0.5 0.4 0.3 Mortgages in arrears Bankruptcies 0.2 1998 00 02 04 06 08 10 12 350 300 250 200 150 100 Mortgages in arrears Bankruptcies 0.8 0.6 0.4 0.2 0 1998 00 02 04 06 08 10 12 220 180 140 100 60 Alberta British Columbia 0.9 0.7 0.5 0.3 Mortgages in arrears Bankruptcies 0.1 1998 00 02 04 06 08 10 12 300 250 200 150 100 Mortgages in arrears Bankruptcies 0.7 0.6 0.5 0.4 0.3 0.2 0.1 1998 00 02 04 06 08 10 12 250 225 200 175 150 125 100 Sources: ; Canadian Bankers Association; Superintendent of Bankruptcy Canada.

10 Metropolitan Housing Outlook Autumn 2013 rates. As economic growth accelerates, therefore, developers will be encouraged to boost housing starts to about 197,100 units in 2015 and above 210,000 units by 2017. Growth in new home prices is forecast to remain at 2 per cent on an average annual basis from 2015 to 2017, while resale price growth will be slightly higher, at 2.5 per cent per year on average. Mortgage Outlook Mortgage interest rates are widely expected to increase in the next year, pushing up carrying costs. Yields on bonds, from which banks finance mortgages, have already moved higher. Still, the Bank of Canada is not expected to start raising its overnight rate before mid-2014, and even then, the Bank will raise rates only gradually, giving households time to adapt. Furthermore, employment and income growth will help to further alleviate some of the pressure of rising interest rates on households. In fact, rising mortgage rates could even provide a short-term boost to the market, as house-hunters with mortgages pre-approved at low interest rates rush to buy homes before these contracted rates expire. The current outlook calls for the three-year conventional mortgage rate to rise from a record-low 3.8 per cent this year to 4.4 per cent in 2014 and 5.1 per cent in 2015. The total number of mortgage approvals fell by 0.3 per cent 2012, as the resale housing market slowed in the second half of last year. Approvals in the new home market continued to climb however, rising 2.2 per cent. Both markets are forecast to see lower levels of mortgage approvals in 2013, reducing total approvals by 2.3 per cent. With growth in the new home market expected to be modest in 2014, the number of new mortgage approvals will decline once again. However, thanks to the existing home market, total mortgage approvals are anticipated to rise in 2014, up by 2.9 per cent. The dollar volume of mortgage approvals rose 0.7 per cent last year, thanks to price growth in the new and resale markets. A similar increase is expected for 2013, with growth in dollar volumes improving to 4.5 per cent next year. Not surprising, tighter mortgage rules are having a bigger impact on the number of high-ratio mortgage approvals (set to fall 3.1 per cent in 2013) than the number of conventional mortgage approvals (set to drop 1.7 per cent). Growth in highratio approvals will be 1.3 per cent for 2014, while conventional mortgage approvals will rise 4.2 per cent. Economic Indicators Real GDP at market prices 1,593,357 1,633,640 1,661,559 1,690,671 1,730,882 1,775,323 1,817,917 1,857,362 (2002 $ millions) 3.4 2.5 1.7 1.8 2.4 2.6 2.4 2.2 Total employment (000s) 17,046 17,309 17,510 17,736 17,986 18,305 18,578 18,801 1.4 1.5 1.2 1.3 1.4 1.8 1.5 1.2 Unemployment rate (per cent) 8.0 7.5 7.3 7.2 7.0 6.4 6.0 5.7 Personal income per capita ($) 31,625 33,001 34,136 35,028 36,018 37,175 38,292 39,344 1.8 4.4 3.4 2.6 2.8 3.2 3.0 2.7 Population (000s) 34,076 34,439 34,827 35,193 35,586 35,992 36,407 36,826 1.2 1.1 1.1 1.1 1.1 1.1 1.2 1.2 Retail sales ($ millions) 438,525 456,388 468,252 483,438 501,819 523,767 546,047 567,271 5.6 4.1 2.6 3.2 3.8 4.4 4.3 3.9 Exchange rate (U.S./Can.) 0.97 1.01 1.00 0.97 0.96 0.98 0.98 0.98 Inflation rate (per cent) 1.8 2.9 1.5 1.1 1.9 2.1 2.0 2.0 Sources: ; Bank of Canada; Statistics Canada.

Autumn 2013 Metropolitan Housing Outlook 11 Financial Indicators (per cent) Bank rate 0.9 1.3 1.3 1.2 1.5 2.3 3.2 3.9 Prime lending rate 2.6 3.0 3.0 3.0 3.3 4.1 5.0 5.7 Three-month Treasury bill 0.6 0.9 1.0 1.0 1.2 2.0 2.9 3.5 One-year conventional mortgage rate 3.5 3.5 3.2 3.1 3.7 4.5 5.4 6.0 Three-year conventional mortgage rate 4.3 4.3 3.9 3.8 4.4 5.1 5.9 6.6 Five-year conventional mortgage rate 5.6 5.4 5.3 5.2 5.3 5.6 6.3 6.9 Federal bonds: 1 year 1.5 1.4 1.1 1.2 1.5 2.1 2.9 3.6 Federal bonds: 5 years 2.4 2.1 1.4 1.7 2.0 2.4 3.0 3.6 Federal bonds: 7 years 2.7 2.3 1.5 2.0 2.3 2.5 3.1 3.7 Federal bonds: 10 years 3.2 2.8 1.9 2.3 2.5 2.7 3.2 3.8 Federal bonds: long term 3.7 3.3 2.4 2.9 3.0 3.0 3.4 3.9 Sources: ; Bank of Canada; Statistics Canada. Housing Indicators Housing starts 189,930 193,950 214,827 181,446 184,927 197,088 207,126 210,212 27.4 2.1 10.8 15.5 1.9 6.6 5.1 1.5 Singles 92,554 82,392 83,657 76,797 77,530 81,028 84,391 82,609 22.3 11.0 1.5 8.2 1.0 4.5 4.1 2.1 Multiples 97,376 111,558 131,170 104,650 107,397 116,060 122,735 127,603 32.6 14.6 17.6 20.2 2.6 8.1 5.8 4.0 Housing completions 186,212 175,431 180,646 188,966 177,776 183,522 195,782 201,293 5.3 5.8 3.0 4.6 5.9 3.2 6.7 2.8 Singles 90,578 79,976 80,630 79,303 76,330 78,099 82,314 82,293 15.7 11.7 0.8 1.6 3.7 2.3 5.4 0.0 Multiples 95,635 95,455 100,015 109,663 101,446 105,423 113,468 119,000 3.0 0.2 4.8 9.6 7.5 3.9 7.6 4.9 Average price of a new home ($) 395,561 404,247 413,730 421,284 429,782 439,275 447,938 456,488 2.2 2.2 2.3 1.8 2.0 2.2 2.0 1.9 Average price of a resale home ($) 338,199 360,648 361,494 372,769 379,236 389,163 399,110 408,657 6.8 6.6 0.2 3.1 1.7 2.6 2.6 2.4 Sources: ; CMHC Housing Time Series Database; Canadian Real Estate Association; Quebec Federation of Real Estate Boards; Statistics Canada.

12 Metropolitan Housing Outlook Autumn 2013 Atlantic Canada Housing Starts (000s) Singles Multiples 20-year average 15 10 5 0 2010 11 12 13f 14f 15f 16f 17f Sources: ; CMHC Housing Time Series Database. Growth in the Atlantic Canadian economy is expected to be 2.3 per cent this year and 1.9 per cent in 2014. Rising oil production both in Newfoundland and Labrador and in Nova Scotia is contributing to these increases. However, housing starts in all four provinces are forecast to decline in 2013 and 2014, having topped 10,000 units for the past 12 years now. Starts will continue to fall in the medium term as well, bringing them back in line with demographic needs. Economic Outlook Atlantic Canada s real gross domestic product is expected to grow by 2.3 per cent in 2013, following a 1.5 per cent contraction in 2012. The region s economy is then forecast to post a more modest increase in 2014, rising 1.9 per cent. Much of the decrease in real GDP last year, and the strength this year, has been driven by change in the Newfoundland and Labrador economy. The province s economy contracted by 4.8 per cent in 2012, largely because of a 20 per cent drop in oil production. This year, renewed growth in the oil sector, along with a booming construction industry, will allow Newfoundland and Labrador s economy to grow by a forecast 5.4 per cent. Meanwhile, after struggling for the past two years, Nova Scotia s economy look brighter in the short term as well, thanks to Deep House Price Growth (percentage chage) 6 4 2 0 2 New Resale 2010 11 12 13f 14f 15f 16f 17f Sources: ; CMHC Housing Time Series Database; Canadian Real Estate Association. Panuke s newly completed offshore natural gas field. Production at the field is forecast to help lift real GDP growth from 1.1 per cent 2013 to 2.9 per cent next year. However, the economy of Prince Edward Island continues to face a less-than-stellar outlook. Efforts by the provincial and federal governments to balance their budgets will continue to weigh on the economy, holding growth in real GDP to a forecast 1.3 per cent this year and just 1 per cent in 2014. In New Brunswick, economic growth is forecast to accelerate from 0.8 per cent in 2013 to 1.9 per cent next year, as weakness in the construction and food processing sectors offsets gains in the resources and manufacturing sectors.

Autumn 2013 Metropolitan Housing Outlook 13 Housing Outlook Atlantic Canada s new home market came roaring back after the global recession, as builders increased housing starts 17.2 per cent in 2010, up to 12,800 units, their highest level since 2003. Low interest rates and improved consumer confidence were boosting housing demand across the region. Buyers of new homes in Nova Scotia were benefitting from the introduction of a $7,000 sales tax rebate that year as well. Somewhat Atlantic Canada: Economic Indicators Real GDP at market prices 89,962 91,020 89,660 91,706 93,415 95,654 96,733 97,764 (2002 $ millions) 3.7 1.2 1.5 2.3 1.9 2.4 1.1 1.1 Total employment (000s) 1,099 1,102 1,110 1,115 1,122 1,137 1,141 1,145 0.6 0.3 0.7 0.5 0.6 1.3 0.4 0.4 Unemployment rate (per cent) 10.5 10.0 10.3 10.3 9.8 9.1 8.5 8.2 Personal income per capita ($) 32,738 34,225 35,323 36,316 37,290 38,459 39,433 40,401 2.6 4.5 3.2 2.8 2.7 3.1 2.5 2.5 Population (000s) 2,352 2,361 2,363 2,361 2,366 2,374 2,379 2,383 0.5 0.4 0.1 0.1 0.2 0.3 0.2 0.2 Retail sales ($ millions) 32,522 33,977 34,449 35,119 36,174 37,207 38,081 38,916 4.7 4.5 1.4 1.9 3.0 2.9 2.3 2.2 Inflation rate (per cent) 2.0 3.3 2.0 1.8 2.0 1.9 2.0 2.1 Sources: ; Bank of Canada; Statistics Canada. Atlantic Canada: Housing Indicators Housing starts 12,772 12,524 12,647 10,950 9,734 9,493 9,415 8,933 17.2 1.9 1.0 13.4 11.1 2.5 0.8 5.1 Singles 7,797 6,911 6,865 5,849 5,693 5,500 5,461 4,976 5.6 11.4 0.7 14.8 2.7 3.4 0.7 8.9 Multiples 4,975 5,613 5,782 5,101 4,041 3,992 3,954 3,958 41.7 12.8 3.0 11.8 20.8 1.2 0.9 0.1 Housing completions 11,513 11,376 11,699 11,352 10,109 9,639 9,505 9,266 2.7 1.2 2.8 3.0 11.0 4.6 1.4 2.5 Singles 7,698 7,141 6,521 6,184 6,002 5,730 5,634 5,375 3.6 7.2 8.7 5.2 2.9 4.5 1.7 4.6 Multiples 3,815 4,234 5,178 5,169 4,107 3,909 3,871 3,891 1.0 11.0 22.3 0.2 20.5 4.8 1.0 0.5 Average price of a new home ($) 322,074 332,005 339,660 351,763 357,729 364,804 372,020 379,380 2.3 3.1 2.3 3.6 1.7 2.0 2.0 2.0 Average price of a resale home ($) 138,432 141,324 142,756 140,607 144,668 147,791 150,978 154,078 4.4 2.1 1.0 1.5 2.9 2.2 2.2 2.1 Sources: ; CMHC Housing Time Series Database; Canadian Real Estate Association; Statistics Canada.

14 Metropolitan Housing Outlook Autumn 2013 surprisingly, even though demand was accelerating, growth in new home prices was slowing, slipping to a modest 2.3 per cent in 2010, down from 3.1 per cent the previous year and 10.9 per cent in 2008. In the resale market, existing home prices did strengthen a little in 2010, rising from 3.7 per cent in 2009 to 4.4 per cent. Weaker economies hampered demand in the housing markets in Newfoundland and Labrador and in New Brunswick in 2011. In turn, builders in those two provinces reduced housing starts, lowering them 1.9 per cent for the Atlantic region as a whole even though starts in Nova Scotia and Prince Edward Island continued to increase. Indeed, Prince Edward Island s new home market was particularly busy in 2011, with builders raising starts by nearly 25 per cent in response to stronger international migration numbers as a result of the province s nominee program. Builders in Prince Edward Island held housing starts steady last year as well. A number of new condominium developments also increased starts in Newfoundland and Labrador s new home market in 2012. But, with real GDP growth still muted, starts fell in each of Nova Scotia and New Brunswick, holding the increase in total starts for Atlantic Canada to just 1 per cent last year. Home prices in the new and resale markets continued to be modest over the past two years, increasing 2.7 per cent on an average annual basis in the new market and an average of 1.6 per cent in the resale market. In spite of stronger economic growth overall for Atlantic Canada in 2013, tighter mortgage rules, the completion of some condominium projects, and a return to more modest population growth in Prince Edward Island have all been lowering demand in the region s new home market. In addition, in level terms, housing starts in Atlantic Canada have been well above demographic requirements for a number of years now, having topped 10,000 units annually for more than a decade. Moreover, with interest rates eventually rising, builders are expected to lower Atlantic Canada s housing starts both this year and through the medium term. Starts are forecast to fall 13.4 per cent in 2013, 11.1 per cent in 2014, and by an average of 2.8 per cent per year from 2015 to 2017. Growth in new home prices is expected to rise slightly in 2013, up to 3.6 per cent, while resale prices are forecast to fall 1.5 per cent, the first annual price decline in 13 years. Over the rest of the forecast, 2014 to 2017, price growth in the new market is anticipated to average 1.9 per cent annually, while it is forecast to average 2.3 per cent per year in the resale market.

Autumn 2013 Metropolitan Housing Outlook 15 Quebec Housing Starts (000s) 60 Singles Multiples 20-year average 40 20 0 2010 11 12 13f 14f 15f 16f 17f Sources: ; CMHC Housing Time Series Database. A soft investment outlook, along with weak external demand, has led to anemic employment growth and unsteady household confidence in Quebec this year, holding real GDP growth to 1.4 per cent. Quebec s new home market will also remain weak in 2013, with total starts falling 23.5 per cent. A balanced market and better economic growth in 2014 will encourage builders to raise starts an average of 2.4 per cent annually through 2014 and 2015. Economic Outlook Growth in Quebec s real gross domestic product is forecast to accelerate to a still modest 1.4 per cent this year, following an increase of only 1 per cent in 2012. A weak investment outlook for both the residential and non-residential construction sectors, coupled with weak demand for exports, underpins this year s soft prognosis. But the much anticipated recovery in the U.S. economy and its housing market should improve export growth and the manufacturing outlook in 2014. Full production of Bombardier s CSeries aircraft, to be assembled near Montréal, will provide an additional economic boost. Meanwhile, consumer spending is only slowly improving. Employment is forecast to gain 1.4 per cent in 2013 and 1.1 per cent in 2014, bringing the unemployment rate down only slightly to 7.6 per cent next year. Consumers will remain understandably wary. In all, the provincial economy is forecast to grow House Price Growth (percentage chage) 10 8 6 4 2 0 by 2.2 per cent in 2014. The medium term looks decent, with GDP predicted to rise 2.5 per cent in 2015 and 2 per cent in 2016. Housing Outlook New Resale 2010 11 12 13f 14f 15f 16f 17f Sources: ; CMHC Housing Time Series Database; Quebec Federation of Real Estate Boards. Builders in Quebec s new housing market increased starts by 18.3 per cent in 2010 as the province began to recover from the global recession. Indeed, demand for new housing was being driven by improved gains in employment that year, as well as stronger population growth and low interest rates. Construction of both single-detached and multiple-family housing contributed to this increase. In level terms, total housing starts topped

16 Metropolitan Housing Outlook Autumn 2013 51,000 units in 2010, their highest level since 2004. However, in spite of the higher population growth, at their 2010 level, starts were above demographic requirements. As a result, inventories rose, and growth in new home prices slowed, dropping to 2.4 per cent, down from 2.9 per cent the previous year and an average of 5 per cent annually in the five years before that. Quebec: Economic Indicators Real GDP at market prices 295,398 300,275 303,322 307,656 314,389 322,277 328,842 334,565 (2002 $ millions) 2.5 1.7 1.0 1.4 2.2 2.5 2.0 1.7 Total employment (000s) 3,918 3,955 3,985 4,042 4,085 4,144 4,191 4,220 1.8 1.0 0.8 1.4 1.1 1.5 1.1 0.7 Unemployment rate (per cent) 7.9 7.7 7.8 7.7 7.6 7.2 6.9 6.8 Personal income per capita ($) 33,518 34,828 35,921 36,486 37,449 38,548 39,591 40,533 1.8 3.9 3.1 1.6 2.6 2.9 2.7 2.4 Population (000s) 7,895 7,968 8,043 8,109 8,173 8,236 8,299 8,362 1.0 0.9 0.9 0.8 0.8 0.8 0.8 0.8 Retail sales ($ millions) 99,551 102,505 103,648 105,551 109,222 113,052 116,600 119,887 6.2 3.0 1.1 1.8 3.5 3.5 3.1 2.8 Inflation rate (per cent) 1.3 3.0 2.1 1.2 2.0 2.2 2.0 1.9 Sources: ; Bank of Canada; Statistics Canada. Quebec: Housing Indicators Housing starts 51,363 48,387 47,367 36,220 36,395 37,907 38,539 37,645 18.3 5.8 2.1 23.5 0.5 4.2 1.7 2.3 Singles 19,549 16,554 16,059 13,796 13,940 14,355 14,568 13,713 11.5 15.3 3.0 14.1 1.0 3.0 1.5 5.9 Multiples 31,814 31,833 31,308 22,424 22,456 23,552 23,971 23,932 23.0 0.1 1.6 28.4 0.1 4.9 1.8 0.2 Housing completions 45,798 44,526 44,564 42,758 37,309 36,899 38,291 38,117 5.8 2.8 0.1 4.1 12.7 1.1 3.8 0.5 Singles 18,738 15,779 15,847 14,228 13,639 13,548 13,962 13,525 11.7 15.8 0.4 10.2 4.1 0.7 3.1 3.1 Multiples 27,060 28,747 28,716 28,529 23,670 23,351 24,330 24,592 2.1 6.2 0.1 0.7 17.0 1.3 4.2 1.1 Average price of a new home ($) 293,728 299,580 304,180 308,506 314,380 321,452 328,636 335,644 2.4 2.0 1.5 1.4 1.9 2.2 2.2 2.1 Average price of a resale home ($) 249,591 261,411 272,014 274,868 282,264 290,069 297,039 304,179 8.5 4.7 4.1 1.0 2.7 2.8 2.4 2.4 Sources: ; CMHC Housing Time Series Database; Quebec Federation of Real Estate Boards; Statistics Canada.