It’s the opposite instead.
“We see little that can stop the appreciation in property values near term,” RBC economist Robert Hogue wrote in a market update.
Hogue’s paper came out on the day the Canadian Real Estate Association (CREA) reported that July 2020 home sales posted the highest record in history.
“If anything, many markets are likely to experience further [price] acceleration,” Hogue wrote.
The Canadian real estate market dipped in April this year, amid the lockdowns and economic impacts brought about by COVID-19.
As Hogue wrote, COVID-19 “did not destroy this year’s spring market—it mostly delayed it”.
The CREA reported on Tuesday (August 17) that 62,355 home sales happened in July 2020, marking the “highest monthly sales figure on record going back more than 40 years”.
The price of a typical home in Canada rose 7.4 percent year-over-year last month, the “biggest gain since late 2017”.
Meanwhile, the national average price for homes sold in July 2020 posted a “record $571,500, up 14.3% from the same month last year”.
In B.C.’s Lower Mainland, the Real Estate Board of Greater Vancouver reported earlier that the price of a typical home increased to $1,031,400 in July this year.
The price represents a 4.5 percent increase over July 2019. It is also 0.6 percent higher compared to June 2020.
In his August 17 market update, Hogue noted that supply and demand conditions “got a lot tighter Canada-wide” last month.
“There is nothing to indicate any imminent slump in prices,” the economist wrote.
“This is poised to keep the market humming in August and possibly September,” the RBC economist predicted.
Hogue noted that the sales-to-new listings ratio jumped to 0.74 Canada-wide in July, the “highest it’s been in 18 years”.
