Despite previous calls for a housing market slowdown by the CMHC, it appears that real estate prices continue to carry their strong momentum from 2020 into the new year. Indeed, the increase in demand for housing, and subsequent surge in prices, has been the result of Canadians flocking to more spacious housing in wake of stay-at-home orders and remote work flexibility.

However, once other sectors of the economy stabilize and reach their respective pre-pandemic levels, Canada’s real estate market will likely continue to remain robust, as a post-pandemic population boom is expected to keep demand high for rental units and homes.

According to CIBC deputy chief economist Benjamin Tal, housing prices are expected to remain elevated even once the pandemic is over. “That’s the reality of the situation in the Canadian housing market until we fix the supply issue that is really impacting valuation in big cities,” he said in a television interview with Bloomberg. He suggests that the housing demand outlook may be overlooking the growth in Canada’s population levels once the economy returns to normal levels.

Tal notes that the census problem was already evident prior to the pandemic, primarily as a result of Canadian citizens returning from places such as Hong Kong and the US and then not being accounted for in census estimates. According to him, these returning citizens will create a strong housing demand in the future. “We didn’t know the numbers because, quite frankly, Stats Canada does not capture the number of people returning to Canada… they really do not distinguish between tourists and returning citizens.”

Going forward, Tal reiterates the need for proper census compilation, where those otherwise missing from the data are accounted for. Low interest rates, coupled with pent-up demand are currently leading the surge in Canada’s real estate; however, once the pandemic is over, the underestimated population growth will likely be the missing factor taking center stage.