{"id":12217,"date":"2019-04-17T10:10:14","date_gmt":"2019-04-17T17:10:14","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=12217"},"modified":"2019-04-03T11:14:53","modified_gmt":"2019-04-03T18:14:53","slug":"the-housing-market-slowdown-is-about-to-take-a-bite-out-of-canadas-rebounding-economy","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/04\/the-housing-market-slowdown-is-about-to-take-a-bite-out-of-canadas-rebounding-economy\/","title":{"rendered":"The Housing Market Slowdown is About to Take a Bite Out of Canada&#8217;s Rebounding Economy"},"content":{"rendered":"<p style=\"text-align: justify;\">The Canadian economy was firing on all cylinders in January, posting its strongest monthly growth in the better part of a year \u2013 but that\u2019s not likely to continue, says one economist.<\/p>\n<p style=\"text-align: justify;\">The culprit? The country\u2019s housing market, which has seen a marked decline in sales and prices over the past year following the introduction of tougher mortgage rules.<\/p>\n<p style=\"text-align: justify;\">\u201cUltimately, January managed its solid gain thanks to gains in manufacturing and construction,\u201d writes Eric Lascelles, RBC Global Asset Management\u2019s chief economist, in his latest instalment of the #MacroMemo series.<\/p>\n<p style=\"text-align: justify;\">\u201cThe latter, in particular, doesn\u2019t seem likely to persist given broad-based weakness in residential real estate,\u201d Lascelles continues.<\/p>\n<p style=\"text-align: justify;\">According to a recent Statistics Canada release, Canadian GDP increased by 0.3 percent in January compared to the previous month. This wiped out the combined declines recorded in the last two months of 2018.<\/p>\n<p style=\"text-align: justify;\">\u201cThe rise was widespread as 18 of 20 industrial sectors were up,\u201d the Statistics Canada release reports.<\/p>\n<p style=\"text-align: justify;\">Residential construction soared 3.1 percent, building on gains in December 2018. \u201cThere was continued growth in home alterations and improvements, multi-unit housing construction and a pick-up in single and semi-detached housing construction,\u201d the national statistical agency explains.<\/p>\n<p style=\"text-align: justify;\">At least partly due to mortgage stress testing that was introduced last January, renos are on the rise in Ontario, an economist with Central 1 Credit Union recently told Livabl.<\/p>\n<p style=\"text-align: justify;\">Instead of facing the test, which requires uninsured mortgage applicants to qualify at a rate 200 basis points above their contact rate, some are opting to renovate the homes they already own.<\/p>\n<p style=\"text-align: justify;\">\u201cThey\u2019re looking to renovate it either to stay in it a little bit longer, or, they\u2019re looking to renovate it so when the economy picks up again, they have a home that\u2019s competitive on the market \u2014 that\u2019s part of it,\u201d Edgard Navarrete, Central 1\u2019s Ontario regional economist said in an interview last week.<\/p>\n<p style=\"text-align: justify;\">Lascelles notes January\u2019s overall economic expansion occurred at the fastest rate in eight months. \u201cThe performance was all the more impressive given that the mining\/energy sector was down substantially, in part due to mandated oil production cuts in Alberta,\u201d he says.<\/p>\n<p style=\"text-align: justify;\">\u201cTo the extent those cuts have since lessened, it stands to reason that the sector\u2019s drag should diminish in the coming months,\u201d Lascelles adds.<\/p>\n<p style=\"text-align: justify;\">That could be good news for Calgary\u2019s housing market, which has remained depressed since a considerable collapse in oil prices in 2014.<\/p>\n<p style=\"text-align: justify;\">The local economy needs to pick up before recent federal government announcement of measures to help first-time homebuyers \u2014 including increasing the amount that can be withdrawn from RRSPs and a shared-equity mortgage program \u2014 can take root, suggests Ann-Marie Lurie, chief economist of the Calgary Real Estate Board.<\/p>\n<p style=\"text-align: justify;\">\u201cThe problem in Calgary is the fact that we\u2019ve been struggling with a weak job market,\u201d Lurie tells Livabl. \u201cWe need to see the shift in the economist climate first.\u201d<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2019\/04\/housing-market-slowdown-canadas-rebounding-economy.html\" target=\"_blank\" rel=\"noopener noreferrer\">The Housing Market Slowdown is About to Take a Bite Out of Canada&#8217;s Rebounding Economy<\/a> by Josh Sherman | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Canadian economy was firing on all cylinders in January, posting its strongest monthly growth in the better part of a year \u2013 but that\u2019s not likely to continue, says &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/04\/the-housing-market-slowdown-is-about-to-take-a-bite-out-of-canadas-rebounding-economy\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-12217","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Housing Market Slowdown is About to Take a Bite Out of Canada&#039;s Rebounding Economy &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/04\/the-housing-market-slowdown-is-about-to-take-a-bite-out-of-canadas-rebounding-economy\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"The Housing Market Slowdown is About to Take a Bite Out of Canada&#039;s Rebounding Economy &#8226; 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