Spring housing market looms over the Bank of Canada’s rate decision. Here’s why
Global News
The Bank of Canada itself has warned a hot spring housing market could 'stoke' inflation. Here's what economist say those fears mean for the central bank's rate decision Wednesday.
Fears that the spring housing market could “overheat” will be in the background as the Bank of Canada readies for its interest rate decision on Wednesday, experts say.
The spring housing market, which kicks off in March, is typically one of the busiest times of the year for home buyers and sellers in Canada.
So far, the spring housing season is a “mixed picture,” according to RBC assistant chief economist Robert Hogue, as the Bank of Canada’s benchmark interest rate remains high and boxes out some prospective buyers.
Preliminary data from local housing boards show some western markets, particularly in Alberta, saw a strong uptick in home sales in March. In Toronto, housing activity has declined for two consecutive months.
Average home prices are meanwhile ticking up in some regions including the GTA after a correction in the market tied to the central bank’s rate tightening cycle over the past few years.
“In some parts of the country, that recovery seems to be relatively robust,” Hogue tells Global News. “Prices are going up, but not that rapidly.”
Rishi Sondhi, economist with TD Bank, said in a housing market report released Monday that the first quarter of the year is “tracking stronger than anticipated.”
Unseasonably warm weather helped to fuel a hot start to housing activity in January and February, he noted, and some of those early sales pulled demand forward from the typically busy spring season. The Easter long weekend falling at the end of March also dampened overall sales in that month, he said.
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