April 21, 2025
Real Estate News
Canada’s real estate sector may be feeling the long shadow of the 2008 Global Financial Crisis more than commonly believed, according to a new analysis by BMO Capital Markets comparing Canadian and Australian economies.
Despite similar trajectories in population growth and monetary policy, Australia’s housing‑driven economy outpaced Canada’s over the past four decades.
In 1980, Canada’s nominal GDP was nearly twice that of Australia’s (in Canadian‑dollar terms). By 2024, that ratio had fallen to approximately 1.25 to 1, reflecting Australia’s stronger expansion in both total output and output per person.
Douglas Porter, BMO’s chief economist, notes that population growth alone does not explain Canada’s relative slowdown. Both countries saw their populations surge—Canada to 41.5 million and Australia to just over 27 million, a ratio of about 1.5:1—but Australia maintained faster GDP growth. Housing investment, a non‑productive drag on GDP, weighed more heavily on Canada as residential construction and credit‑fuelled demand escalated.
Since roughly 2008, Australia’s GDP per capita has climbed above Canada’s, reversing decades of Canadian advantage. “Both nations face federal elections this spring,” Porter said. “They share similar inflation and growth rates today, yet diverge sharply in long‑term real‑income gains.”
The findings underscore structural headwinds for Canada’s property markets: rising construction costs, uneven regional demand, and potential overreliance on credit‑driven housing investment. Investors and developers may confront slower rent growth and greater supply‑side pressure in the coming years.
Source: Better Dwelling
