But housing gains will likely only delay the decline until 2014, Desjardins says

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Growth rates in Ontario and British Columbia to be significantly higher this year after ‘suffocating’ revival of the housing market in early 2023, but the strengthening is likely to only delay the decline, Desjardins Group economists say.

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“While this development helps the growth arithmetic for 2023, it does not completely rule out a decline – it merely postpones it until 2024,” lead economists Marc Desormeaux and Hélène Bégin said in their provincial outlook report.

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Economists said home sales had rebounded in most provinces after an initial lull Bank of Canada interest rate hike cycle earlier this year. However, strong gains in Ontario and BC were notable as households in these two provinces are more burdened by affordability pressures and household debt levels.

“As 2024 approaches, provinces exposed to housing should see the more pronounced slowdown we have long expected,” they said.

Both Ontario and BC’s largest housing markets retreated in June after central bank activity resumed increase in interest rates. However, economists expect the dampening effect of higher borrowing costs to affect all regions in the coming months.

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Amid the projected economic slowdown, Canada’s oil-producing regions should fare best, Desormeaux and Bégin said, as Alberta and Saskatchewan benefit from solid commodity prices and production gains.

Rapid population growth and acute labor shortages have also fueled economic expansion in all provinces this year, which economists describe as “the proverbial rising tide that lifts all provincial growth boats.”

• By e-mail: dpaglinawan@postmedia.com | Twitter:

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