Vancouver will be the fastest growing metropolitan economy in the country this year and next, according to a report by the Conference Board of Canada. Meanwhile, Victoria is poised to expand at its fastest rate this year since 2007.

“While Vancouver’s economy is forecast to slow next year, partly due to federal and provincial government measures directed at cooling the over-heated housing market, the pace of growth still will be strong enough to maintain the metro area’s first-place ranking,” says Alan Arcand, associate director of the Centre for Municipal Studies, the Conference Board of Canada.

Read: Pace of housing starts slips on big drop in B.C.

Report highlights:

  • Vancouver’s real GDP is expected to grow by 4% this year and slow to a still solid 2.8% in 2017.
  • Real GDP in Victoria is expected to reach 2.5% this year and advance by another 2.4% next year.
  • Builders in Vancouver are on track to break ground on nearly 28,400 residential units in 2016, the highest number on record.

Thanks to record-level housing starts and many non-residential projects, the construction sector will be Vancouver’s top performer in 2016, with the finance, insurance and real estate sectors not too far behind. The transportation and warehousing sector — a key industry cluster in Vancouver — will reap the rewards of a low Canadian dollar, despite overall weakness in the global economy, and grow above 6% for the second consecutive year in 2016. Employment is on pace to climb by 3.9% this year, the strongest gain since 1994.

Read: Economy packs on 44,000 part-time jobs in October

However, federal and provincial governments’ actions to cool the overheated housing market will take some steam out of the economy over the near term, leading to slower growth in construction and in finance, insurance and real estate. While it’s difficult to predict the extent to which the measures will impact the economy, estimated output in these industries will total approximately $290 million lower in 2017 compared to a scenario where no policy changes had been made.

Also read: Home sales in GTA smash record, even as prices soar