Statistics Canada has published new results on Canada’s gross domestic product and retail sales, showing an increase of 0.2% in Canada’s GDP and 0.8% in Canada’s retail sales, and signalling a lift in the country’s economy. According to StatsCan’s results, the main drivers of Canada’s positive growth have been auto sales and real estate.
Although the increase was less than economists were hoping for, it still has positive implications for Canada’s economy. Among the positive points: two months of back-to-back growth, which hasn’t been seen since the end of 2007.
On the services side, Canada’s real estate growth was attributed to real estate agents and brokers who propelled the industry’s growth and led a 7.2 per cent gain in service value. Goods production in the real estate sector was increased, too, as the weather turned colder, and electric power utilities made a 2.4 per cent jump as Canadians turned on their heat. Finally, construction saw growth as well, thanks to engineering and repair work, and renovations and improvements in residential properties.
The strong home sales market also helped to drive some retail sales. Home centres and hardware stores, which showed a slump earlier in the year, are now back on par with last year’s sales figures, boosted by initiatives like the renovation tax credit, that has provided an incentive for home-owners to make improvements to their properties. And with solid residential home sales, furniture stores and manufacturers reported six straight periods of revenue increase, although after a significant drop last year, sales still remain below last year’s figures.
While economists agree that it’s going to be a struggle to meet the 3.3 per cent expansion predicted by the Bank of Canada for the fourth-quarter, real estate continues to look promising. According to the Canadian Real Estate Association, home resales hit a record high in November, while the housing market is expected to remain quite active.
That’s particularly true in Toronto, where announcements from the Building Industry & Land Development Association and the Real Estate Board are claiming major growth in the GTA over November 2008’s figures: an increase in new home and condominium sales by 156 per cent, and a doubling of home sales, respectively.
Nelson Goulart
Broker of Record with Signature Service GMAC Real Estate
www.ssgmac.ca
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