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Canadian Industrial Outlook: Residential Construction—Winter 2018 The Conference Board of Canada, 14 pages, March 29, 2018 Report by Karen D'Souza

Canadian Industrial Outlook: Residential Construction—Winter 2018

The Conference Board of Canada, 14 pages, March 29, 2018
Report by Karen D'Souza

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This report examines the short-and medium-term economic and profitability outlook for Canada’s residential construction industry. Document Highlights Macroeconomic Outlook—The Canadian economy performed extremely well in 2017, with an expansion of 3.0 per cent. Growth was propelled by booming housing markets and buoyant consumer spending. Going forward, tight monetary policy will cool the housing market, putting downward pressure on new residential construction. Inventories and Housing Starts—The backlog of unsold homes in Canada is falling, which is positive news for home builders. However, housing starts are expected to decline throughout the forecast as the market cools and homebuyers adjust to rising interest rates, slower employment growth, and increasingly stringent mortgage rules. OSFI Guideline B-20—The Office of the Superintendent of Financial Institutions’ (OSFI) new stress test will lower the maximum affordable price for many homebuyers and could potentially price some homebuyers out of the market.

This report examines the short-and medium-term economic and profitability outlook for Canada’s residential construction industry.

Document Highlights

Macroeconomic Outlook—The Canadian economy performed extremely well in 2017, with an expansion of 3.0 per cent. Growth was propelled by booming housing markets and buoyant consumer spending. Going forward, tight monetary policy will cool the housing market, putting downward pressure on new residential construction.

Inventories and Housing Starts—The backlog of unsold homes in Canada is falling, which is positive news for home builders. However, housing starts are expected to decline throughout the forecast as the market cools and homebuyers adjust to rising interest rates, slower employment growth, and increasingly stringent mortgage rules.

OSFI Guideline B-20—The Office of the Superintendent of Financial Institutions’ (OSFI) new stress test will lower the maximum affordable price for many homebuyers and could potentially price some homebuyers out of the market.

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