Photo: Alexis Gravel/Flickr
Montreal is expected to be the fastest-growing economy in Canada this year, and housing has helped it claim the pole position in more than one way, according to the Conference Board of Canada.
In its Metropolitan Outlook: Autumn 2018, published this week, the not-for-profit think tank projects Montreal’s economy to expand by a “robust” 2.9 percent this year.
“The positive momentum in Montreal is being supported by strong non-residential investment, solid job creation, and healthy population growth,” the Conference Board of Canada says in a news release.
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“The area’s labour market is tightening, which is fostering wage gains and, in turn, keeping consumers in a spending mood,” the board continues.
The upshot of this — beyond boosting retail sales — is a homebuilding boom, says the board.
In the first half of the year, contractors broke ground for more than 19,300 homes, up 20 percent from the same time in 2011, according to the Association des professionnels de la construction et de l’habitation du Quebec. The construction was largely centred in Montreal.
The Canada Mortgage and Housing Corporation earlier this month noted a relatively tight rental market in the Montreal area is supporting homebuilding, as is demand for seniors residences to house an aging population.
Meantime in Toronto, one of the most expensive housing markets in the country, consumers have racked up high levels of household debt which is limiting spending power. With interest rates rising, the Conference Board of Canada doesn’t expect the trend to reverse, at least in the next year. It anticipates Ontario’s economy will grow by 2.3 percent this year, down from last year’s rate of 3.4 percent.
“These factors (interest rates and debt) plus government cooling measures will also put a lid on near-term growth in the area’s housing market,” writes the board.