Market trends point to an accelerated clip for the rest of the year, economist says
The Canadian housing market will likely enjoy accelerated activity as the year goes on, even as the latest labour market numbers point to another rate hold by the Bank of Canada, according to economist Sherry Cooper.
Latest official data indicate that the Canadian economy saw approximately 35,000 new jobs in March. Cooper noted that this robust level has kept the unemployment rate at 5% for the fourth straight month.
“But the jobs market is a lagging indicator, so the BoC will likely continue the pause on April 12th,” Cooper said in a new analysis.
Cooper further predicted that Canadian GDP will grow by 1.5% in Q1, a significant increase from the virtually zero growth seen at the end of 2022.
“Consumer spending remains strong, and the early indications suggest that the housing market is picking up and prices are rising on limited supply,” Cooper added. “As the year progresses, supply shortages will become more evident, and rent will increase sharply, making ownership more attractive.”
TD Economics made a similar forecast in its recent analysis, noting that sales now appear to have “reached a trough” after considerable declines in 2022.
“We’re now forecasting quarterly sales gains through 2023, with stronger growth expected in the year’s second half,” said Rishi Sondhi, economist at TD. “In the near term, tight job markets should spur continued income gains, even as economic growth and hiring slows, and lower bond yields should offer some respite from stretched affordability conditions across Canada.”
