Sellers re-entering the housing market, buyers continue to be constrained: economist

Canada’s major housing markets are starting to recover, but one economist says a more pronounced recovery cannot be sustained until interest rates move significantly lower.

Robert Hogue, assistant chief economist at RBC, said in a report Tuesday that as sellers have begun re-entering Canada’s major housing markets this spring, affordability conditions are still weighing on buyers. He said figures from local real estate boards in April highlight sharp increases in new listings and inventory across Vancouver, Toronto and Montreal. 

“This could reflect a confluence of sellers that include many who took a pass at the fall market (when demand and prices dipped) in the hope of better outcomes this spring. Some of the sellers could be in distress in the face of high interest rates,” the report said. 

Hogue also pointed to lower home resale figures in March and April in most major markets as buyers are not moving to capitalize on increases in supply.