Ontario’s Sluggish Income Growth And Sustained Real Estate Strength

Recent forecast by the Conference Board of Canada has predicted a 2.6 per cent increase in the Greater Toronto Area’s gross domestic product this year, but recent data from Statistics Canada indicated that this will appear to have negligible impact on Torontonians’ buying power.

This is because the average earnings per week in Ontario improved by just 1.1 per cent last year. This is a troubling development in the steady growth in home prices that the province has been experiencing over a while now.

Nanos Research executive chair Nik Nanos told CBC News, “There’s a collision between the psychology of consumer confidence and the reality of the economic numbers. When people don’t feel that real wages are significantly increasing, when they’re unsure about their level of job security, it creates a psychological chill on consumer confidence.”

This trend doesn’t seems to be cooling down any time soon, as Ontario’s hot housing market has gradually become a crucial driver of Ontario’s income.

Real estate now represents 13.2 per cent of the provincial GDP, which is a larger figure than the manufacturing segment’s 12.1 per cent.

The reduction and decline in manufacturing’s significance was brought about by the past recession, and part-time and contract work has now become an economic reality for the new generation of workers in Ontario.