Residential Market Commentary - What we know. What we can hope for.
We have been receiving a lot of unsettling economic data lately.
Coming out of February, unemployment stood at 5.6% and nearly 250,000 jobs had been created in the previous 12 months. By the end of March, nearly a million jobs had disappeared. The Conference Board of Canada projects that could climb to 2.8 million by the end of April. The best guess right now is that unemployment stands at about 20%.
Nationally, March housing starts dropped 7.3% compared to February. The value of building permits – a forward looking indicator – crashed in March, dropping 23%.
As distressing as the numbers are, the real anxiety remains the unknown. But, many of the country’s best-known economists are putting on brave faces. They point to the temporary nature of the job losses. StatsCan reports most workers expect to be back on the job in about six months, once the coronavirus pandemic is deemed to be under control. We have also come to know that month-to-month job numbers can be volatile and need to be watched over time to establish trends.
The decline in housing starts can, at least in part, be attributed to bans on new construction. A number of jurisdictions are restricting builders to the completion of existing projects, only. And the drop in building permits is uneven across the country. B.C. is down nearly 27%, Ontario is down 50.5%, while Alberta increased nearly 12% and Halifax jumped 153%.