The nation’s housing market activity and purchasing power can be supported by further economic growth, according to a new analysis by the Fraser Institute.
The independent public policy think-tank stated that even just a 1% year-over-year increase in GDP would be sufficient to increase Canada’s per-person income by more than $19,000.
Meanwhile, an annual economic growth rate of 3% would boost the country’s per-person income by around $45,150 after 20 years, ending up at a total of $105,029.
For perspective, Canadian GDP grew at an average annual rate of 2.17% from 2011 to 2018. This represented a slight deceleration from the roughly 3% average observed from 2001 to 2010.
“Given the importance of economic growth to household income in Canada, and to reducing social and political conflict, policymakers should prioritize faster economic growth,” according to Fraser Institute senior fellow Steven Globerman, who also served as editor of the study titled The Costs of Slow Economic Growth.
“Increased economic growth means improved living standards for Canadians, so economic growth remains an issue worthy of serious attention.”
A recent report by real estate information portal Zoocasa noted that as much as 91% of Canadians believe that housing prices in their local markets have been rising faster than average incomes.
Moreover, 92% of the Zoocasa respondents said that this price growth has made it all but impossible for the average Canadian to enter into home ownership. Around 84% Canadians considered housing a crucial economic and political issue, while 78% argued that the newly elected federal government should give the affordability crisis the attention that it needs.