fell 7.1 per cent ($17.7 billion) from the previous quarter to $231.2 billion.<\/span><\/p>\nCOVID-19 lockdowns and work-from-home mandates caused a surge in real estate investment as Canadians sought larger homes on the resale market, fixed up their current ones, or opted to build.\u00a0<\/span><\/p>\n<\/p>\n
Residential investment actually surpassed business investment as a share of Canada\u2019s GDP during the course of the pandemic. However, that trend has shifted due to decreased sales, delayed construction projects, and a return to pre-pandemic spending patterns.<\/span><\/p>\nFollowing the second quarter\u2019s record-setting mark of nearly $250 billion, a reduction in housing investment was anticipated as pandemic uncertainty eased and COVID case numbers dropped, although the size of the shift is notable.<\/span><\/p>\nSeasonally adjusted home renovation spending fell to $73.3 billion during the third quarter, down 11.6 per cent ($9.6 billion), marking the biggest quarterly decline since 1974.<\/span><\/p>\nNew construction, the largest of the three residential investment subcomponents, dropped to a seasonally adjusted $102.7 billion in the third quarter, down 2.6 per cent ($2.8 billion) from the previous quarter.<\/span><\/p>\nAccording to StatCan, after adjusting for inflation new construction saw a 5.2 per cent dip, the largest since 2009. While rising costs played a role, part of the decrease could also be attributed to construction delays related to supply chain disruptions and labour shortages.\u00a0<\/span><\/p>\nOwnership transfer costs \u2014 a tally of realtor commissions, land transfer taxes and legal fees \u2014 was one of the key drivers of residential investment earlier this year as sales figures soared.<\/span><\/p>\nReduced resale activity pushed transfer costs down 8.8 per cent ($5.3 billion) to a seasonally adjusted $55.2 billion during the third quarter. The numbers were down nationwide, with only Newfoundland and Labrador and Yukon reporting higher figures than the previous quarter.<\/span><\/p>\nWhile housing investment was on the downswing, StatCan noted that Canadian household spending on semi-durable goods and services rose 14 per cent and 6.3 per cent, respectively, during the third quarter as pandemic restrictions eased.<\/span><\/p>\nClothing and footwear spending exceeded pre-pandemic levels, increasing by more than 25 per cent from the previous quarter, while transport (40.3 per cent) and personal grooming (35.8 per cent) led the way on the service side.<\/span><\/p>\n
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<\/a>Photo: Tyler Farmer<\/a> \/ Unsplash<\/a><\/em><\/p>\n