Canadian Housing Market Shows Signs of Slow Recovery Amid Ongoing Risks

A new report from RBC Economics suggests that Canada's housing market is showing signs of recovery. Home resales have been on a 'winning streak since April,' with inventory levels stabilizing and prices starting to rise. This trend is attributed to improved affordability and job prospects, which are boosting confidence among potential homebuyers.

However, the report notes that the process of recovery will be gradual and uneven across different regions. Ontario and British Columbia, where market corrections were particularly severe, are expected to take longer to recover. In contrast, areas with more resilient markets may not see significant gains due to steady interest rates and lower population growth.

The condo market is also expected to lag behind in terms of recovery, as high inventory levels in Toronto and Vancouver continue to weigh on prices. Robert Hogue, an assistant chief economist at RBC, notes that hundreds of thousands of Canadians who put plans to buy a home on hold may now be entering the market.

Despite these signs of recovery, Hogue cautions that the Canadian economy still faces significant risks, including recent escalations in the US trade war and conflict in the Middle East. These external factors could undermine confidence and derail the recovery process.