Montreal and Vancouver Housing Record Highest Growth
By Miro Svoboda, Investment Advisor, Harbourfront Wealth – Sonora Wealth Group
February 18, 2025: The Canadian dollar’s value remained relatively stable against the US dollar, with market activity subdued due to a US holiday today. Market participants are eagerly anticipating tomorrow’s first meeting between US and Russian officials in Saudi Arabia, which is seen as a crucial step towards resolving the ongoing tensions between Ukraine and Russia through diplomatic means. The optimism surrounding the talks has bolstered risk-on sentiment, supporting the Canadian dollar.
At the same time, a sharp decline in US retail sales has fueled expectations of a Federal Reserve rate cut in July, weighing on the US dollar.
Domestically, mixed housing market data has clouded the outlook. While seasonally adjusted housing starts (SAAR) rose by 3% in January, the six-month trend dipped by 2.5%. However, the 7% increase in annual housing starts in urban areas indicates that the market for new construction is resilient. Montreal and Vancouver recorded the highest growth, driven mainly by the increase in multi-unit construction. Conversely, Toronto witnessed a substantial decline.
Adding to the unfavorable data, CMHC’s projection of a slowdown in housing starts between 2025 and 2027, raises concerns over the market’s sustainability. These structural challenges in the housing sector could weigh on future economic growth and the Canadian dollar’s trajectory.