Photo: Kurt Bauschardt/Flickr
The Conference Board of Canada predicts Canadian economic growth is set to slow next year, and the country’s cooling housing market is playing a part.
“Household spending is slowing due to several factors, including weaker job growth, rising interest rates and cooling home prices,” reads a news release from the Conference Board of Canada, a not-for-profit research organization.
The board expects the Canadian economy will expand by 1.9 percent next year, down from this year’s anticipated 2.1 percent growth.
Housing Market News Alerts
Sign up now for news alerts on the Canadian housing market
“Economic growth in 2019 will depend on improved business investment and a better performance from the non-energy trade sector,” says Matthew Stewart, the board’s director of the national forecast, in a statement.
The Conference Board of Canada’s comments came a day after the Canadian Real Estate Association published an updated forecast for 2019 that suggests home sales next year will sink to a nine-year low.
CREA predicts home sales next year will total 456,000, down 0.5 percent from expected activity this year.
“While economic and demographic fundamentals remain supportive for housing demand in many parts of the country, policy headwinds together with rising interest rates are limiting access to mortgage financing and negatively impacting homebuyer sentiment,” CREA notes in a statement.
An earlier survey from real estate Zoocasa suggests half of long-term homeowners in Canada are confident in the real estate market.
Some 50 percent of respondents who have owned a home for at least a decade expressed confidence in the market, but only 45 percent of those who have owned for less than 10 years shared the same view.