Canada’s
gross domestic product (GDP) remained virtually unchanged in the fourth quarter
of the year despite another substantial decline in real estate transactions.
Real estate
agent and brokerage activity fell 11.7% in Q4, according to new GDP data released
by Statistics Canada on Tuesday, marketing the latest in a string of quarterly
declines since Q1 of last year when interest rates began their aggressive hiking
cycle.
Looking at
the year as a whole, real estate agent broker activity was down 28.2% in 2022,
the first annual decline in this sector since 2018. The news doesn’t come as a
total surprise, with home sales having fallen significantly across the country
last year as would be buyers struggled with affordability challenges and
potential sellers held back, not wanting to list in an uncertain market.
Rental
market activity, on the other hand, posted a 0.4% growth in 2022 as cities like
Toronto and Vancouver continued to see increased levels of competition, pushing
prices continually higher.
Overall
housing investment, which also includes construction, renovations, and
ownership transfer costs, declined 11.1% in 2022. Demand for residential
mortgages weakened throughout the year as already existing mortgage debt
continued to grow, expanding by $138.8B.
As
developers struggled with higher construction and labour costs, residential building
construction trended downwards most of the year, ending 2022 with a 5.7% loss.
It doesn’t come as too much of a surprise then that wages in the construction
sector led wage growth in Q4, jumping up 2.4%.
The
construction sector overall ended 2022 up 1.2%, but this is notably a much
smaller gain than the 5.4% seen in 2021. This gain was also largely driven by
engineering and other construction activities, with the liquified natural gas
project in British Columbia and wind farm projects in Alberta being large contributors.
“Weaker activity in residential and non-residential building construction
tempered growth in the overall sector,” the StatsCan report notes.
Advance
information indicates that Canada’s GDP increased 0.3% in January, StatsCan
says, with further decreases in the construction industry offset by increase in
the mining, quarrying, and oil and gas extraction, wholesale trade,
professional, scientific and technical services, and transportation and
warehousing sectors.
Written
By: Laura Hanrahan
Source By: STOREYS