The impact of last year’s mortgage rule changes is being mitigated by strong economic growth, according to a new report
“Robust economic and employment growth are underpinning the buoyancy in starts, despite government policies aimed at cooling housing activity in key markets,” Altus Group said in its latest housing report. “Both single-family and apartment starts should trend higher in 2017. Starts are expected to remain above 200,000 units in 2018, as above-potential economic growth fuels solid job gains, supporting housing demand.”
Canada is forecasted to see 206,700 housing starts in 2018. While that is down slightly from 2017’s expectation of 211,300, it’s up from 2016’s mark of 197,915.
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Source: Altus Group
According to the report, Canada’s economy is trending to show its fastest growth pace in seven years due to a recovering oil and gas sector and strong consumer spending.
“In the 2nd quarter of 2017 (Chart 3), employment grew at its fastest year-over year pace since 2013 with job growth accelerating significantly in B.C, Manitoba, Quebec and Alberta,” the report reads. “Solid job gains are expected in 2018 as well. In response to economic strength, the Bank of Canada is now raising its policy rate after some 7 years. However, any future increases are likely to take place in small increments and therefore unlikely to have any significant negative impacts.”
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Source: Altus Group
