Sunday, September 8, 2019

Canadians are growing more optimistic about the market’s prospects

Canadians’ relatively positive outlook on housing has been amplified by stronger market performance and starts activity.

The end-of-July edition of the Bloomberg Nanos Canadian Confidence Index posted a 58.6 reading, up from the 58.3 seen at June’s end.

This optimism was bolstered by surging home sales in Toronto and Vancouver, which both enjoyed 24% growth last month.

Coupled with a steadily recovering national economy and a downward movement in borrowing costs, more and more Canadians are shedding their fears of a potential housing downturn.

Of the Bloomberg-Nanos survey respondents, 43.2% are predicting local real estate prices to increase in the next six months. This was the highest month-end level since December 2017.

In contrast, the share of those expecting lower prices was at 15.2%, markedly below the 2019 average of 16.4%.

High levels of construction activity contributed further to the positive consumer outlook. Latest CMHC figures indicated that the national trend in housing starts was 208,970 in July, up from June’s 205,765 units.

“The national trend in housing starts increased in July, despite a decrease in the level of SAAR activity from June,” CMHC chief economist Bob Dugan stated. “High levels of activity in apartment and row starts in urban centres in recent months continued to be reflected in the high level of the total starts trend in July.”

Vancouver, especially, provided a major boost to this output: As much as 85% of the market’s housing starts last month were in the multi-unit segment.

“Overall, continuous strengthening of economic fundamentals supported a steady growth of 25% in the year-to-date starts in the CMA between 2018 and 2019.”

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