Thank you, Mr. Chair.
First of all, thank you for welcoming us today to the Standing Committee on Finance as part of pre-budget consultations for the 2024 budget.
The Association des professionnels de la construction et de l'habitation du Québec, or APCHQ, is a private, non-profit organization that brings together more than 20,000 companies in 13 regional associations. Specializing in housing and renovation, it has been, since 1995, the employer representative with the mandate to negotiate the collective agreement for 16,000 employers in the residential sector.
The APCHQ's mission is to be a unifying agent of change for the benefit of Quebec society by representing and supporting professionals in the residential construction and renovation industry. The APCHQ's 20,000 members, through their residential construction and renovation activities, contribute to the province's economic and social development by housing Quebeckers. Our industry represents an economic contribution of $45.6 billion and 270,000 direct and indirect jobs. More specifically, 70% of our members work in renovation, and 30% in new construction. Finally, our members work mainly in the residential sector.
Since the early 2000s, the real estate market has been in deep imbalance. The resale market systematically favours sellers. Property prices have quadrupled. Affordability is currently at its worst level in three decades. Quebec's homeownership rate is declining for the first time in its history, and young people are the hardest hit. Quebec is also lagging far behind the rest of Canada. Indeed, the homeownership rate stands at 59.9% in Quebec, while it is 66.5% in Canada.
We are therefore collectively creating the first generation that will not be able to own a home, a generation that, in 20 or 30 years' time, will be more vulnerable. Given the impact of home ownership on household wealth, this is very worrying.
Furthermore, the rental vacancy rate is below the equilibrium threshold of 3% across the province, falling from 2.5% in 2000 to 1.7% in 2022. In the absence of supply, upward pressure on rents is strong. It's what you might call a perfect storm.
Following on from this state of play, let's now talk about the causes of this historic downturn. The problem is not cyclical, but structural. Over the past few decades, the supply of new housing has not kept pace with demand. As elsewhere in the country, there is now a strong consensus that Quebec has been underbuilding for several years. In 2023, housing starts in Quebec are already down by 37% after three quarters. The meteoric rise in construction costs, which have reached nearly 40% since the pandemic, and the more recent surge in financing costs, mean that many real estate projects remain on ice, as they are simply no longer financially viable.
The APCHQ forecasts 37,000 residential housing starts in Quebec in 2023, a decrease of 35%, and a very slight recovery of around 11% in 2024, with 41,000 starts. In short, we're heading for the worst year for residential construction since 2001.
The APCHQ is proposing several measures to accelerate the pace of residential construction, but also to promote access to home ownership over the next few years. Already, we welcome the abolition of the GST on the construction of rental housing. This is a structuring measure that is particularly appreciated by the industry. There is no justification for taxing an essential good. Having a roof over your head is not a luxury.
This work must continue, notably by ensuring better financing for the construction and renovation of social and affordable housing; substantially improving the GST rebate for new homes; extending the maximum amortization period for insured mortgages to 30 years; relaxing the “stress test” when qualifying for a new loan, and eliminating it altogether for a renewal.
But this won't be enough, as demand will remain very strong, if not stronger. Our net migration has reached new records. The federal government announced two weeks ago that it was maintaining a threshold of 500,000 new arrivals by 2025, a target that will be maintained over the next few years. In addition, we will need to continue to welcome a high number of temporary workers over the next few years, due to our widespread labour shortage and aging population.
In conclusion, we invite the federal government to spare no effort, to work closely with the Quebec government and municipalities; in short, to be nimble, together.
To unravel the crisis, concerted, strong and targeted interventions are needed, and this from all stakeholders in the housing industry.
Thank you.