Having been involved in the home building industry for four decades, I’ve seen it all — booms, recessions and everything in between.
And I’ve also seen, first-hand, the remarkable attitude Canadians have about making their own opportunities. One young man I met started a cleaning business and purchased his first home at the age of 20. Today, he also owns two rental accommodations and is doing well. I get tired of the doom-and-gloomers who float negative economic predictions over our heads like storm clouds. We continue to have a strong economy in Canada, with relatively low interest rates fueling housing sales, and we have an enthusiastic population who believe in our future.
In October, the Greater Toronto Home Builders’ Association (GTHBA) reported that from January through September 2006, there were more than 30,000 new homes and condos sold in the GTA. This is right on track for the industry to reach 40,000 new home sales for the seventh consecutive year. Mortgage rates have a lot to do with these numbers, of course, as well as an expanding labour market and consumer confidence. And in the area of economics, consumer confidence plays a huge role in dictating our economic health.
Just look at condos. Over the past few years, we’ve read all sorts of media predicting suffering sales from a saturated market. The GTHBA’s October press release reports that September 2006 was the strongest September in the last five years for high-rise sales. Obviously, people are buying homes with a positive attitude in mind, and I believe that spirit of optimism helps to make this country a great place to live.
A senior economist for the International Monetary Fund in Washington told me that economists have more information than ever before to base predictions on, yet they are sometimes wrong. In 1980 and 1981, the word from economists was that interest rates in Canada would never return to single digits. Well, look at us now! Canadians helped make it happen with our confidence. People make the difference, but we sometimes take our individual, and collective, power for granted.
When people buy new homes, they contribute to the well-being of their municipality, province and Canada as a whole. According to the GTHBA, the construction of a single home creates the equivalent of 3.3 jobs for a full year. If this is surprising, it’s probably because five out of six of those jobs take place away from the building sites. When you consider the billions of dollars generated from all aspects of new home construction, this industry contributes greatly to Canada’s gross domestic product. And the property taxes and income taxes paid to all levels of government during the stages of home construction help support the envious quality of life we enjoy in this country.
- Hugh Heron is Principal and Partner in the Heron Group of Companies, President of Heathwood Homes and a Member of the Board of Directors of Canada Mortgage and Housing Corporation, as well as a Past President of the Toronto Home Builders’ Association and the Ontario Home Builders’ Association.