![\"home-sales-canada-pandemic-recovery\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2021\/05\/home-sales-canada-pandemic-recovery.jpeg\")
<\/a>Photo:\u00a0Tierra Mallorca<\/a>\/Unsplash<\/a><\/em><\/p>\nThe Canadian housing market\u2019s rapid resurgence in summer 2020 and sustained strength through the fall and winter has been a major driver of the country\u2019s early economic recovery following its initial crash last spring.<\/p>\n
This strength has been accompanied by concerns over affordability, speculation and overheated markets. But now that April data has shown that some of the heat has come off of Canadian housing, market experts are beginning to contend with the potential impacts of a prolonged cooldown in buyer activity.<\/p>\n\n
In commentary published today, Capital Economics\u2019 Stephen Brown wrote that April\u2019s national drop in home sales could \u201cact as a headwind to the [economic] recovery over the rest of the year\u201d if the declines continue.<\/p>\n
While full national data for April isn\u2019t available yet, Brown pointed to substantial monthly decreases in sales activity in both Toronto and Vancouver as indicative of a broader decline in sales across the country.<\/p>\n
\u201cSigns of a slowdown always cause commentators to question whether prices could go into reverse. We see that as a risk in the future, but for now the bigger risk is the potential negative effect that further falls in sales could have on GDP,\u201d wrote Brown.<\/p>\n
Even prior to Canada\u2019s first quarter leap in home sales, Brown said that ownership transfer costs related to residential investment had soared to 2.7 percent of Canada\u2019s GDP. Pre-pandemic, it made up about 1.5 percent of the country\u2019s GDP.<\/p>\n
\u201cIf sales were to quickly revert to pre-pandemic levels, then it would be a meaningful headwind for the recovery,\u201d he wrote.<\/p>\n
According to the Capital Economics team, while mostly anecdotal, commentary from real estate agents on the ground in hot markets suggests prices are levelling off and there are fewer bidding wars taking place.<\/p>\n
But even with sales cooling compared to the early months of the year, activity across Canada\u2019s housing markets remains elevated and is likely to continue on this path thanks to what Brown describes as \u201cstructural changes that the pandemic has brought about.\u201d<\/p>\n
\u201cFor example, it is only this week that many major firms offered clarity on the permanence of their employees working from home after the pandemic has faded from view,\u201d he wrote.<\/p>\n
The firm is forecasting a gradual decline in sales that won\u2019t materially impact the country\u2019s pandemic recovery.<\/p>\n
The Canadian housing market\u2019s rapid resurgence in summer 2020 and sustained strength through the fall and winter has been a major driver of the country\u2019s early economic recovery following its initial crash last spring.<\/p>\n","protected":false},"author":5,"featured_media":216453,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","apple_news_api_created_at":"2021-05-07T16:50:57Z","apple_news_api_id":"29600887-c436-480b-aab9-ee46ee53ed11","apple_news_api_modified_at":"2021-05-10T14:26:58Z","apple_news_api_revision":"AAAAAAAAAAAAAAAAAAAAAA==","apple_news_api_share_url":"https:\/\/apple.news\/AKWAIh8Q2SAuque5G7lPtEQ","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"middle","apple_news_slug":"","apple_news_sections":["https:\/\/u48r14.digitalhub.com\/sections\/09b86915-7d2b-3acd-915b-b215002d01b7"],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":""},"categories":[11269],"tags":[],"coauthors":[8652],"apple_news_notices":[],"yoast_head":"\n