Photo: James Bombales

Next week, Canada’s Q2 real GDP numbers will be released, and economists are predicting a positive report.

“We expect a strong 3.5 [per cent quarter-over-quarter growth],” writes TD senior economist James Marple, in a recent note. “Growth appears widespread in the quarter, supported by a surge of exports following production disruptions early in the year.”

One sector that didn’t do the economy any favours? The housing market, which continued its policy-induced sales slump for much of the quarter.

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“Housing is expected to subtract from growth for a second straight quarter as home sales and housing starts fell in Q2,” writes BMO Canadian rates & macro strategist Benjamin Reitzes, in a recent note.

But according to Marple, the housing market is unlikely to weigh on the economy for much longer. In fact, he believes that the market has bottomed out, and should begin to warm up in the coming months.

“Housing markets have shown resilience following the policy-related pullback in activity early in the year,” he writes. “Sales have rebounded in recent months, bringing the market closer to seller’s territory and putting a floor under prices.”

While he acknowledges that activity is unlikely to reach the record heights of last spring’s housing frenzy, Marple writes that the risk of a housing crash has diminished significantly.

“With soft, but no-longer-declining housing activity, the Canadian economy appears on course to deliver modestly above-trend economic over the remainder of this year,” he writes.

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