Canada’s current economic strength, propelled in large part by the housing market, is such that only trade uncertainty will impede its recovery.
In her recent analysis, Dominion Lending Centres chief economist Dr. Sherry Cooper stated that based on CREA figures, sales saw a minute 0.3% annual increase in June after considerable gains in three months prior to that.
“Housing activity remains well below levels recorded over much of 2015-2017–the boom years,” Cooper wrote. “National sales have moved up to close to their 10-year average and are up nearly 10% from the six-year low touched in February of this year.”
Activity in Greater Toronto and Montreal made up for the declines observed in BC. “More considerable monthly increases were generally focused in Quebec and Southern Ontario. They were offset by declines in Greater Vancouver, Calgary, Halifax-Dartmouth and the province of Newfoundland and Labrador.”
Despite the relatively muted June performance, however, Canadian housing remains robust overall, with sales values and transaction volumes feeding into national economic stability.
“Trade uncertainty is the only thing right now that would derail the Canadian recovery,” Cooper assured.
“The Bank of Canada is getting its predicted rebound in economic activity in the current quarter and believes growth will accelerate further in Q4 and 2020. That should keep the Bank on the sidelines for some time.”
“Currently, the markets are expecting the Federal Reserve to cut interest rates later this month and to continue to do so in 2020,” Cooper added. “It is unlikely that the Bank of Canada will follow the Fed unless the trade war with China worsens. The White House has succumbed to political pressure to reduce trade tensions.”