Canada’s real estate sector is powering through a period of renewed economic optimism, according to Statistics Canada.

GDP related to real estate has posted six consecutive months of growth, the federal agency reported. Real estate, rental, and leasing activities increased 0.5% in October, driving the national economy’s 0.3% growth for the month. This growth marks the industry’s strongest monthly performance since January 2024, with activity levels reaching their highest point since April 2022.

Keith Reading, director of research at Toronto-based Morguard, attributed the growth to the Bank of Canada’s aggressive interest-rate cuts, which began in June.

“We’re seeing a pretty solid uptick in housing market activity in general,” Reading told the Toronto Star.

He noted that declining interest rates have encouraged both first-time homebuyers and investors to re-enter the market after a prolonged period of high rates and inflation had sidelined them.

“Between April 2022 and that first rate cut, mortgage rates had been climbing, and buyers retreated to the sidelines,” Reading told the Star.

The real estate industry’s resurgence was led by the offices of real estate agents and brokers, which recorded a 6.3% jump in October. This growth coincided with increased home sales, particularly in the Greater Toronto and Greater Vancouver areas.

Reading told the Star that he anticipates further activity, driven by new federal mortgage rules, including broader eligibility for 30-year amortizations and the easing of stress test requirements for renewals and lender switches.

Meanwhile, the construction sector also showed positive momentum, rising 0.4% in October, marking its third-consecutive month of activity growth. Non-residential building construction led the way with a 1.8% increase, fuelled by investment in institutional buildings. However, repair construction slightly declined, tempering the overall sector’s gains.

While the real estate market continues to thrive, Reading warned of potential challenges, including rising housing demand outpacing supply and speculation inflating prices.

“If demand increases, eventually those prices start to edge up again,” he told the Star.

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