Canadian GDP predicted to enjoy rise
THE Canadian Mortgage and Housing Corporation recently hosted its Manitoba Housing Outlook Conference in Winnipeg. Hundreds of housing professionals attended the largest such presentation in recent memory, focusing on the national, provincial and local scenes with explanations regarding our past, present and future housing trends.
Chief economist Bob Dugan, in a presentation entitled Housing Market Conditions and Outlook, called for a steady increase in Canadian GDP to 2.5 per cent in 2010 and 3.2 per cent in 2011, with unemployment at just over eight per cent.
Although some concern was expressed over a potential one per cent increase in mortgage rates for this year, it was noted that we have been enjoying the lowest rates in more than 50 years. Previous economic downturns had demonstrated a rise in mortgages in arrears. Not so, this time, as they remain below .5 per cent as they have for more than a dozen years.
One surprising yet comforting statistic that Mr. Dugan put forward was the amount of equity that the average Canadian has in their house. His estimate was that nearly four in 10 homeowners have 30 per cent or more equity in their homes, considerably higher than our American counterparts.
Another CMHC presenter was Lai Sing Louie, a regional economist who presented information on the Manitoba economic scene. It was acknowledged that our province’s GDP fell almost one per cent in 2009, but the forecast is for positive growth of between two and three per cent in each of 2010 and 2011.
The recent momentum in Manitoba’s retail sales market shows confidence in the economy and is a good indicator for larger purchases. A 3.1 per cent increase in Manitoba average weekly wages in 2009 supports the theory of increased spending.
In addition, Manitoba’s unemployment rate is projected to remain below the national average. Our net migration numbers are among the best in country and show no signs of slowing down. Another positive aspect is that our interprovincial migration is netting out near zero.
This is likely due to the fact that those provinces which historically have attracted Manitobans (B.C., Alberta) were hit much harder by the recent recession and the job and living outlook was far better in Manitoba.