A steadily recovering national economy along with declining borrowing costs is helping stave off fears of a major housing correction.
The latest edition of the Bloomberg Nanos Canadian Confidence Index posted a 58.6 reading at the end of July, up from the 58.3 seen at June’s end.
This positive outlook was buoyed by home sales in Toronto and Vancouver, which both saw 24% increases last month.
Other contributing factors were stronger housing starts impelled by high levels of activity in the apartment and rowhouse segments. Latest CMHC figures indicated that the national trend in housing starts was 208,970 in July, up from June’s 205,765 units.
“The national trend in housing starts increased in July, despite a decrease in the level of SAAR activity from June,” CMHC chief economist Bob Dugan stated. “High levels of activity in apartment and row starts in urban centres in recent months continued to be reflected in the high level of the total starts trend in July.”
Particularly, Vancouver provided significant impetus to this development. As much as 85% of the market’s July starts were in the multi-unit segment.
“Overall, continuous strengthening of economic fundamentals supported a steady growth of 25% in the year-to-date starts in the CMA between 2018 and 2019.”
Of the Bloomberg-Nanos survey respondents, 43.2% are expecting local real estate prices to grow in the next six months. This was the highest month-end level since December 2017.
In contrast, the share of those bracing for lower prices stood at 15.2%, noticeably below the 2019 average of 16.4%.