“Housing has become a bigger piece of the gross domestic product in Canada and if this area really slows down then the knock on effects will touch other areas of the economy,” Edgard Navarrete, a regional economist for Central 1 Credit Union, stated in an email.
A new national survey from real estate consultancy Altus Group suggests some developers are beginning to shelve would-be condo projects because of higher interest rates. Some 33% of developers polled for the survey say pausing new condo or rental projects is among their responses to the changing interest-rate environment.“I can tell you: projects are being delayed,” Colin Johnston, President of research, valuation, and advisory for Altus Group, says in an interview with STOREYS.
The correction might already be taking a toll on multiple sectors of the labour market. Canada lost a total of, and Desormeaux highlights that a quarter of them were in construction. Employment in the information, culture, and recreation sector is weakening, too, another possible effect of the housing downturn. “That could be because of a pull-back in consumer spending related to higher inflation and more elevated housing costs,” Desormeaux notes.