OCED projects economy growth but warns against real estate prices
The economy is expected to continue to increase by 2.4% this year but the OECD continues to warns about the rising home prices in Canada and other international real estate markets including Australia, Sweden and the UK.
The Canadian economy is expected to grow alongside the United States and surpass other Group of Seven countries but the OECD is worried at the rate sales prices continue to soar in the country.
Several real estate markets are seeing their average sale prices increasing with most of these markets going through a lack of supply amid high demands from investors.
Canada’s economy is however projected to improve from its low figures last year. The increase towards the economy will most likely come from fiscal initiatives, export-market growth and also a reduction in commodity-related investment.
In the OECD’s Interim Economic Outlook, several of the world’s leading economies had their economy estimates increased but the world economic estimate was maintained at 3.3% which is a bit higher than last year which was 3.0%.
The main reason for this increase is that the global confidence level has increased yet; consumption, investment, trade and productivity are still to improve.
But the Paris-based organization continues to show concern over the rapid home sale prices in countries including Canada, Australia, Sweden and the UK.
The group suggested that an increasing rise of home prices only projects a sharp decline in the economy is a given time. Because the high home prices will definitely at some point in time cool down and it will have very serious implications.
The OECD follows the economic tend of 35 countries around the world including China, India, Brazil and Canada.
The global economic growth in 2017-18 is boosted by continual and expected fiscal efforts and the leaders of the economic growth projected for the year will be the U.S and Canada with Germany expected to be the next highest G7 country with 8% GDP growth.
The global economy in 2018 is projected to be around 3.6% with the U.S and Canada having a 2.8% and 2.2% growth increase respectively.
Although the OECD’s reports for Canada’s economic growth for 2016 might be about 1.2%, a recent figure indicates a 1.4% growth instead in accordance with Statistics Canada figures released last week.