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Economic Growth to Slow, Housing to Stay Balanced

According to a recent report released by the Conference Board of Canada, the Canadian economy is expected to slow slightly in 2011 in most major centres.

 

The Metropolitan Outlook covers 27 census metropolitan areas. Of these 27, there is expectation for only a handful -  Windsor, Calgary, Oshawa, Regina, Saskatoon, London, Sherbrooke, Winnipeg, and Thunder Bay -  to see higher real gross domestic product (GDP) growth this year.

 

"Most Canadian cities rebounded well from the recession. This year, however, a weaker domestic economy, winding down of federal and provincial government stimulus measures and uncertain economic conditions in the United States will result in stable or lower growth in a majority of cities," said Mario Lefebvre, Director, Centre for Municipal Studies

In terms of overall economic growth, in the top spot as the fastest growing Metropolitan economy for 2011, is Windsor. On the heels of growth of 3.5 % last year, there is an expectation that the GDP will rise by 3.9% in 2011- thanks in part to an expected cash injection in the construction industry, via the $1.6-billion Windsor-Essex Parkway project which will begin in 2011.

Similarly, Calgary will continue to grow promisingly- buoyed in part by the robust energy sector. There is forecasted growth of by 3.7 % in 2011, and expectations that it will exceed 4.0% in 2012.

In terms of housing, Robin Wiebe, Senior Economist with the Conference Board of Canada says that most of the markets are currently balanced; “Of 28 markets surveyed, 23 of them are balanced. Of the remaining five, two are in buyers market positions (Saskatoon and Trois Rivieries) and the other three are in sellers’ position (Thunder Bay, Sudbury and Oshawa).”

Wiebe holds hope that balance will be maintained in the Canadian housing market through the next year. “The real issue here is, we have not half bad employment numbers and reasonably low interest rates, which are good for the market.  There is also the introduction of mortgage rule changes- which have yet to take effect.  There may be a bit of a rush to market to buy for people who won’t qualify under those changes- before they take effect. This might bring sales forward.”

“There are enough good things present in our economy to avoid tipping too far into buyers’ market territory. There is an expectation, as well, that interest rates will remain low, and so affordability is still present. There is also expectation that employment numbers will continue to stay in a good range.”

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