A report released today by the Canadian Association of Accredited Mortgage Professionals (CAAMP) predicts significant job losses coming in the wake of the slowing housing market. Analysis by Chief Economist Will Dunning points out that fewer sales mean fewer housing starts which will ultimately lead to fewer jobs. Housing starts are already down by 15% from the 2011/12 average and its projected that the total drop will approach 30% by 2015. The impact of a 30% drop in housing starts is 150,000 fewer jobs.
“CAAMP has argued that government efforts to slow the housing market have long term negative economic consequences and the data continues to support that assessment,” said Dunning. “Until now, housing has played a major role in the recovery from the 2008/09 recession. That economic driver is disappearing as we see housing related jobs dry up and consumer confidence erode at a time when the national Recovery is struggling to pick up steam.”
If our government is determined to squash the housing market, then they need to tell us their action plan for economic growth and job creation. Lowering interest rates while keeping first time buyers out of the market is widening the gap between the haves and have nots. The rich are buying more homes and renting them to would be first-time buyers. Not only that, but the increased demand for rental housing is driving up rental costs. We are headed on a bleak path and need some positive government intervention to keep our economy growing.