![\"\"](\"https:\/\/www.canadianrealestatemagazine.ca\/wp-content\/uploads\/2023\/10\/0380_637420909249798954.jpg\" "\\"-\\"")
<\/p>\nHome sales in Canada\u2019s three largest cities surged last month, but RBC anticipates softening in the next few months.<\/p>\n
\u201cAside from some bumps in , this summer\u2019s broad market rally remained largely intact so far this fall,\u201d said the bank\u2019s report, Canada\u2019s Housing Market was Exceptionally Strong in October. \u201cStill, with earlier pent-up demand now entirely exhausted and tight supply poised to become more of a constraint on activity, we expect things to in the coming months.\u201d<\/p>\n
Year-over-year, home sales in , Montreal and Vancouver increased by 24.4%, 35.9% and 30.9%, respectively, in October, but with new listings rising by 16% during the same period, driven mainly by downtown condo markets, the flurry of activity could wind down.<\/p>\n
\u201cThe downtown condo market is currently the weak spot in Canada\u2019s housing picture,\u201d said the report. \u201cMany condo investors have been hit hard by the downturn in the rental market (both long-term and short-term) in Canada\u2019s largest markets and are offloading their units. Soaring supply is tipping the scale in favour of buyers.\u201d<\/p>\n
The report added that condo prices have plateaued in Greater Toronto and Vancouver, and so has rental demand.<\/p>\n
\u201cWe expect condo prices to decline further in the near term,\u201d continued the report. \u201cWith immigration largely stalled and unemployment remaining high among lower-income Canadians, we see little that will boost rental demand in short order.\u201d<\/p>\n
Problems pertaining to could reemerge in the housing market, as well, because constricted supply inevitably drives prices higher.<\/p>\n
\u201cWe expect the covid-induced market churn to fade over the coming year. As it does, supply will become even more of a constraint on overall activity. The persistence of tight overall demand-supply conditions will maintain strong upward pressure on prices\u2014bringing affordability issues back into the fore. These factors, in our view, will slow down the pace of home resales across Canada.\u201d<\/p>\n
The RBC report concedes that virtually nobody could have predicted that the worst recession in generations would result in housing price acceleration, and it suggests the market could go in either direction depending on: how the burgeoning work-from-home trend continues, near-term interest rate movement, when immigration to Canada will resume, how the pandemic\u2019s second wave and play out.<\/p>\n
<\/p>\n