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Economic Viewpoint

Canadian Residential Real Estate Outlook: For Better and for Worse, Canada’s Housing Market Is Back

June 23, 2023
Randall Bartlett, Senior Director of Canadian Economics and Hélène Bégin, Senior Economist

  • Canada’s housing market has rebounded sharply since March 2023. We think much of the recent gains are going to have staying power, leading to a further erosion of affordability.
  • Housing demand is particularly strong in Canada, as surging population growth, a tight labour market and amassed pandemic-era savings provide a tailwind to activity. That said, some of this should be offset by higher interest rates. At the same time, new housing supply is expected to cool somewhat going forward, providing further support to prices.
  • At the provincial level, sales activity has been particularly strong in British Columbia and Ontario since the beginning of 2023, and this has helped to push national prices higher. These are also the primary destinations for international immigrants. But a lack of affordability has forced younger residents to look further afield for housing, with Alberta being the primary destination. Other Prairie provinces are also benefitting from solid economic growth and better affordability. The same is true for the Atlantic provinces. Quebec’s housing market hasn’t seen the surge in activity that other big provinces have recently, but things look to be going from bad to worse on the new home construction front. This is the case at the national level as well.