Housing prices have exploded during the pandemic, but that’s expected to cool off, according to a new report from RBC.
The Bank of Canada is expected to raise rates multiple times in the coming months. According to RBC Senior Economist Robert Hogue, he expects home prices to rise — but only slightly.
“Home resale activity this year will be still strong historically but off approximately 13 per cent from 2021. So still a strong year but not quite as strong as last year,” he explains.
“The second half of this year, we do expect that price increases will moderate and potentially moderate quite significantly.”
While interest rates are expected to go up multiple times this year, Hogue says reality will contribute to slower house price growth.
“The higher interest rate will cool demand, but it will take time for demand-supply conditions for the market to come into better balance.”
In terms of other reasons why the market isn’t expected to drop — Hogue points to the expected influx of immigrants as another factor for why we could see the market largely stay strong.
