The Canadian housing market continues to defy the odds in the face of a world economic slowdown, as new statistics from Canada Mortgage and Housing Corp. show new home construction soaring again.
The latest numbers put September starts at 205,900 on an annualized basis, a pace in line with the best period of this housing boom when starts checked in at over 200,000 each year from 2002-2008. This time out it appears the condo sector is driving the market, a trend seen across the country.
That construction is expected to be a key economic driver. The Royal Bank of Canada is forecasting 2.4% growth in Gross Domestic Product in the third quarter on an annualized basis with the housing sector responsible for 50 basis points of that growth.
Bank of Montreal economist Doug Porter noted yesterday there are now 4.3 construction jobs in the U.S. for every one in Canada, way off the historical norm of seven to one. He said in a note it’s tough to believe’ Canada can continue at its present pace.
‘We don’t anticipate the large scale collapse we saw in the United States,’ says David Onyett-Jeffries, an economist with RBC. Maintaining residential construction growth has positive implications for GDP and is going to provide support to it.’