A “more probable scenario” is that sales and prices will both see a more gradual recovery until the BoC starts cutting rates in 2024. The belief was shared by Robert Kavcic, Senior Economist and Director of Economics at BMO,, Scotiabank Economist Farah Omran pointed out that although the speed of the recovery points to “resiliency and strong household finances,” it also creates challenges for the BoC as it attempts to rein inflation back down to its 2% target.
By raising interest rates again in July, the BoC can “help slow down the reheating in the housing market,” and dampen housing affordability concerns. However, despite the increase seen in May, new listings remain historically low. Meanwhile, the seasonally adjusted annual rate ofCombined, the two will worsen the affordability crisis,, Senior Director of Canadian Economics at Desjardins, putting upward pressure on home prices and rent alike.
“Without a concurrent meaningful increase in supply, continued strength on the demand side would reintroduce imbalances to the market,” Omran wrote. “[This would] show up as meaningful increases in prices instead, further delaying the needed improvement in housing affordability conditions.”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.