![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2018\/01\/JPbombales-1866.jpg\")
<\/a><\/p>\nPhoto: James Bombales<\/em><\/p>\n After a rough start to the year, the Canadian economy expanded by 2.9 per cent in Q2, as the housing market finally adjusted to the effects of a new mortgage stress test.<\/p>\n Real estate investment had dropped 2.7 per cent year-over-year in Q1, but a boost in national home sales led to a 0.3 per cent year-over-year increase in Q2.<\/p>\n\n \u201cOn the domestic spending side, consumers and housing were both better than expected, and much better than Q1,\u201d writes BMO chief economist Douglas Porter, in a recent note.<\/p>\n Home sales rose on a month-over-month basis in both June and July, causing several economists to predict that the market will continue to heat up heading into the fall.<\/p>\n \u201cLooking ahead, a more ‘normal’ pace of growth should prevail,\u201d writes TD senior economist Brian DePratto, in a recent note. \u201cHousing activity seems to have bottomed, and so we expect residential investment to continue making a positive contribution, counterbalanced by disruptions in the energy sector.\u201d <\/p>\n