Posthaste: Canada's housing market is hot again — expect it to stay that way, economists say

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Housing market slowdown appears over as prices, sales rise and strength will likely continue, hurting affordability economists say. Read on.

strong labour market

is also helping to ignite housing further. Increases to wages and job security mean people are building more wealth, and buying homes with their money. At the same time, the jobs market shows no sign of slowing down in a meaningful way, the economists said, amid continued high vacancies and a low unemployment rate all while the country welcomes an influx of immigrants. That will help keep the housing market humming along.

There’s another major factor contributing to high prices: supply. Housing starts have been higher than usual, but that won’t last, Desjardins said. What’s more, the housing that’s being built isn’t what buyers really want. Most starts are condos and they are shrinking in size even as detached homes, which carry the heftiest price tag, grow bigger and bigger. The result is a “missing middle” in supply, according to the Canada Mortgage and Housing Corp.

It won’t be enough to take the steam out of the market completely, however. “Despite higher interest rates, housing demand is expected to remain strong for the foreseeable future,” the report said. All those factors are playing out differently in housing markets across Canada, with some areas feeling the effects more than others. For example, British Columbia and Ontario have experienced a spike in prices and sales amid an influx of immigrants. That’s pushed younger homebuyers from those provinces to other markets in search of affordability, and Alberta, along with the Prairies and Atlantic provinces, have benefited from the migration.

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