The Canadian Housing Market Outlook

By Nurit Altman and Craig Wright
Published October 28, 2021 | 12 min listen

Canada’s housing market demonstrated surprising resilience in the face of the pandemic with record levels of activity and prices. While the buying frenzy has calmed from extreme levels, the market continues to operate at historically high levels. How the dynamic of increasing demand, constrained supply and government intervention will play out is being closely watched by those in the real estate industry.

On this episode of The Real Pulse, Craig Wright, RBC’s Chief Economist sits down with Nurit Altman to discuss the Canadian housing market and how the supply-demand dynamics facing the sector will play out in the coming months.


Key takeaways


During the pandemic, the household savings rate increased to historic levels – there is now C$280 billion sitting in bank accounts. With this increased purchasing power, we expect continued strength in housing demand for the foreseeable future.


The federal government’s immigration targets will result in over a million new immigrants over the next three years, putting additional pressure on demand for housing


Housing affordability will continue to be a challenge in the near term as prices continue to increase, interest rates rise and much of the strong income gains will decline - as sizeable government programs will be rolled back.


Despite the disappointing GDP figures, we think the Bank of Canada will hold course and overnight rates will be 50 basis points higher by the end of 2022 relative to today. There is a small risk of a larger move in interest rates – if it were to happen, it will significantly hit affordability and the housing market.


RBC’s base case scenario is for the housing market to cool, not collapse. We expect prices to flatten in the second half of 2022.

For more information from RBC Thought Leadership on the Canadian Housing Market, please see below:

CanadaEconomyHousing MarketOutlookReal Estate

Stay Informed

Get the latest insights from RBC Capital Markets delivered to your inbox.