Rapidly Rebounding Real Estate Market Is Bad News For BoC

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In a surprise to economists, Canadian home sales “defied gravity” in April, rising double-digits despite a significant lack of supply. realestate realestatenews homesales Canada

, writing that April’s “widespread vigour” defied expectations that it would “take a while for the heat to return” to the housing market.

While the market’s unexpected recovery “points to resiliency and strong household finances, it also poses additional challenges for the Bank of Canada as it tries to slow down the economy and bring inflation back to its 2% target,” Omran continued.in a housing market update“The restrictive effect of past interest rate hikes isn’t stopping the housing market from recovering well,” Bégin said.

With a significant loss of affordability weighing on many prospective purchasers, particularly first-time buyers, soaring immigration levels may be becoming one of the primary driving forces behind demand, Hogue said. If so, prices may continue to rise in the months to come, further straining affordability.Zoe Demarco is a Staff Writer at STOREYS and was formerly the Urbanized Editor at Daily Hive. Born and raised in Toronto, she has a passion for the city's ever-changing urban landscape.

 

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Canadian housing market rebounds in April with supply at 20-year lowSince the Bank of Canada put its interest rate hiking plan on pause in January, prospective homebuyers have been racing back into the market
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