According to RICS Global Real Estate Weekly, the improving Canadian economy is helping the Canadian real estate sector. The report said that the “Canadian Central Bank was the first of the G7 countries to lift interest rates.” Consequently, RICS expects construction figures to trend higher due to improving labour markets.

The report also noted that the Canadian GDP gained by 6.1% on an annualised basis in the first quarter - the largest increase since 1999. “Indeed house prices in Canada, having fallen a mere 3.5% in the 9 months to June 2009 have retraced earlier declines and now sit only 1% below the September 2008 market peak. Accompanying the improvements in the pricing backdrop has been a recovery in construction activity. Housing starts climbed by 1.3% to 201,700 on an annualised basis in April.”

“The multi-dwelling category which includes flats rose by 27% to around 98,000 units (annualised) although the single family home category actually fell by 12.7%, which were the first falls in 11 months. Lower interest rates appear to be helping to cushion the sector from a prolonged period of price declines such as those which were seen in the aftermath of the previous correction in March 1990,” stated RICS.