The housing market continues to show signs of heating up
Home-related spending by Canadians saw a significant resurgence in April as housing markets continued to show signs of acceleration, according to RBC Economics.
As of the end of April, consumer spending on housing expenses was 34.1% greater than levels seen prior to the pandemic-era shock.
“Activity ramped up significantly and prices trended higher, most notably in Toronto, Vancouver, and Calgary,” RBC said.
Intensified spending in these regions mirrored a notable increase in activity, despite overall higher prices.
“While still beset by a sharp loss of affordability in the last couple of years, buyers appear more confident to house hunt now that the Bank of Canada has paused its aggressive rate hike campaign (for good we believe),” RBC said in its latest housing sector analysis.
The next few months will likely build on these trends, with the promise of “a better environment for sellers who might have previously been reluctant to sell in a down market,” the report said.
“This will hopefully bring in more supply and prop up historically low inventories,” RBC said. “The end of price corrections is also poised to spur some market-timing buyers into action.”
“That said, the lack of affordability will remain a huge issue, especially for first-time buyers. Our view is this will significantly limit any recovery at first.”