Even as Canada was going through its second covid-19 wave, its economy was not only able to survive but also come out with a positive number. Based on its recent economic numbers the Canadian economy in 2021 will likely regain its losses of 2020. This now leaves the Bank of Canada in a bit of a quandary, its forecasts of the economy picking up in the Q4 2021 might out the window as the numbers are saying it’s a lot sooner.
If that is the case, then the BoC will now have to face possibly hiking interest rates sooner. Against this backdrop is the fact that real estate sales and prices are higher, and this has forced CMHC to retract its comments that the real estate market could see a potential 18% drop in prices. It appears that this is not a foreign buying induced market and that Canadians have been the primary buyers, leaving governments wondering how much income they will really receive from their non-resident taxes.