Earlier this week we learned that, according to Teranet, national house price inflation slowed to a two-year low of 6.6% in March, from 7.5% in February and a recent peak of 14.2% in mid-2017. Based on the latest sales-to-listings data, the growth rate of house prices should now stabilise at about the pace seen in March.
Even a benign end to the decade-long housing boom, which doesn’t involve a decline in prices, would weigh on overall economic growth, however. The slump in home sales will reduce the value of real estate commissions earned and will ultimately lead to a corresponding drop off in both new construction and renovation spending too. As a result, housing will switch from being one of the biggest drivers of economic growth over the last few years to becoming a modest drag.
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