'Surprising' home sales increase challenging BoC's efforts to bring inflation down: economist

One economist says that accelerating momentum in Canada’s housing market ahead of potential interest rate cuts could have spillover effects for the broader economy.

Scotiabank Senior Economist Farah Omran said in an interview with BNN Bloomberg on Friday that rising home sales in December were a “surprising jump for everybody” and the trend continued into January. She noted that rises in home sales have taken place ahead of any moves by the Bank of Canada to lower interest rates. 

“House prices have not started increasing with the increase in sales that we've seen, but that is typical. Typically prices lag the increase in sales, or the decline in sales,” Omran said adding that price increases could occur in the next few months. 

The Canadian Real Estate Association said in January that December was characterized by “surprise” gains in home sales, rising 3.7 per cent compared with the same month a year earlier.