Canadians are still real estate fanatics, but the peak was so high, today’s levels seem normal. Statistics Canada (Stat Can) data shows investment in residential structures increased in Q3. When compared as a percentage of GDP however, residential investment is down from the peak. Although it’s still way above usual.
Residential investment (a.k.a. residential structures in Canada) is real estate’s direct contribution to GDP. It includes construction, renovation, and ownership transfers – but not a comprehensive measure. For example, the renovation part only covers large renovations such as roofs and kitchens. It excludes routine maintenance and superficial upgrades like painting. The segment measures a good portion of real estate, but not quite all. For example, insurance and finance are largely dependent on real estate, but not included here.
Canadian Residential Investment Reached Over $46 Billion In Q3
In current dollar terms, the amount dedicated towards residential investment is growing. Residential investment reached $46.04 billion in the quarter of Q3 2019, up 4.29% from the previous quarter. This works out to an increase of 3.45%, when compared to the same quarter last year. The increase is higher than last year, but the gains are small in contrast to recent years.
Canadian Residential Investment
The amount spent on residential stuctures in Canada.
Source: Stat Can, Better Dwelling.
The year-over-year (YOY) growth is big for a quarter over the past 12 months, but still unusually low. This is the biggest YOY for any quarter since Q4 2017, with most of the recent numbers printing negatives. Even so, this is the second slowest YOY growth for Q3, in the past years. Other than last year, this is slow for the industry.
Residential Investment Is Over 7% of GDP Still
Residential investment as a percentage of GDP is falling, but still elevated. It represented 7.68% of GDP in the quarter of Q3 2019, down from 7.79% from a quarter before. Compared to Q3 last year, it’s a little higher – but some of this appears to be distribution. That is, some quarters in the past year have been slower than usual, and some faster. This becomes apparent when we look at growth over a longer period.
Residential Investment As A Percent of GDP
The amount of Canadian residential investment, expressed as a percent of GDP.
Source: Stat Can, Better Dwelling.
The rolling 12-month trend shows just how dependent Canada has become on real estate. Residential investment as a percentage of GDP is coming down on an annual basis. It most definitely peaked in 2017. We’re still very much above historic norms though. In fact, cheap financing and financial innovations prior to the Great Recession couldn’t even compete with this percent of the economy devoted to real estate.
Canada’s dependence on real estate as a driver for the economy is lower, but higher than it should be. For context, residential investment in the US is below 4 percent today. The US hasn’t breached 7% in over 50 years – even right before the great recession. Canada on the other hand, has been over 7% for almost half a decade now.
Like this post? Like us on Facebook for the next one in your feed.
Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts
NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.
Apple supplier Foxconn aims to double India jobs and investment
Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.
Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.
V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.
He did not give more details.
Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.
In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.
The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.
Taiwan election: Foxconn’s Terry Gou taps star-powered running mate
Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.
He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.
The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.
Foxconn to double workforce, investment in India by ‘this time next year’
Finding Your Perfect Match: The Best Ways to Choose an Online Sportsbook
Howard Anglin: The Conservatives are cruising and the media can't hide its disappointment – The Hub
As LeBron James enters Year 21, the theme of Lakers media day was passing the torch and sharing the load
Silver investment demand jumped 12% in 2019
Search for life on Mars accelerates as new bodies of water found below planet’s surface
Iran anticipates renewed protests amid social media shutdown
Business20 hours ago
Metro Vancouver workers poised to strike as soon as Monday, union says
News23 hours ago
Amid India-Canada row, Elon Musk accuses Canadian PM Justin Trudeau of ‘crushing free speech’; here’s why
Real eState22 hours ago
Swedish Home Prices Fall Again in September, Down 13% From Peak
Art16 hours ago
One family’s battle to be reunited with art looted by the Nazis – CNN
Business17 hours ago
Alleged mortgage fraud victims still not off the hook for payments after criminal charges laid
Economy11 hours ago
Bill Ackman says the economy is starting to slow and the Fed is likely done hiking
Business19 hours ago
Ontario’s minimum wage increase impact upon workers
Media10 hours ago
Sources – James Harden, seeking trade, not at 76ers media day