Ontario sometimes gets painted with a bad brush, especially when it’s compared to the oh-so-lucrative province of Alberta. But now one regional economist with CMHC is saying that in the upcoming months it’s going to be Ontario that sees much more growth. The reason? A housing market that is starting to show signs of balance; and the strong growth in the United States.
“We are seeing a rebalancing of economic growth in Canada,” Ted Tsiakopoulous told brokers at the IMBA conference in Woodbridge earlier this month. “The West has led Central and Eastern Canada for some time; now it’s Ontario’s turn. Home prices have bottomed and remain stable – and thanks to a strong U.S. economy, Ontario is poised to grow.
“We have had a soft landing. we have seen an orderly adjustment in the housing market, and that is good news.”
But that’s not to say that Ontario’s housing market is booming. Everyone realizes that Toronto’s market is still facing prices that are simply too high; and sales might have to slow a bit more before prices start to go down – prompting more buyers to get out onto the market once again.
Tsiakopoulos isn’t worried about that. He went on to say that while Ontario’s economy is set to grow, the housing market will only make up 20 per cent of the growth Ontario puts towards the GDP. The rest will come from exports – an area that’s about to get a big burst as the United States recovers and starts to use those exports more and more.
“U.S. consumers are driving economic growth,” he states. “There is a lot of pent-up demand after years of paying down debt.”
He points towards the fact that 75 per cent of Ontario’s exports are shipped to the U.S., and that as that continues to pick up speed, so too will the economic growth of the province. He also believes that it may start laying the foundation for another real estate boom.
Something else he believes will help fuel the housing market – first-time buyers. While they’ve shied away from the market in past months due to high prices, a new onslaught of those buyers will emerge at just about the time those prices are starting to come down – children of the “Echo Boomers.”
These are children of the younger Baby Boomers, who are just now starting to leave Mom and Dad’s house and look for a home to call their own.
“The first-time buying sector has slowed but is not dead,” says Tsiakopoulos. “The pent-up demand among first-time buyers in Ontario from the ‘Echo Boom effect’ – kids of the younger boomers who were born in the 1960s – will be reentering the market and fuelling the housing market.”
What province do you live in, and how do you feel about Tsiakopoulos’ remarks?