Coming Reality Check May Be Painful

The full effects of the pandemic on Canada's real estate market may not be felt until later this year and the coming reality check could be a painful one, says a report from Lowestrates.ca. Mortgage deferral programs have helped offset the economic shock to households across the country. However, the end of these programs in the fall could lead to an influx of properties on the market as some Canadians may no longer be able to afford their homes, triggering a slump despite low mortgage rates. “It's very hard to say right now if the blistering house price gains we've seen in the past few months will continue into the autumn and winter season. That's when the market will really be tested,” says Justin Thouin, CEO of LowestRates.ca. “The overall economy is continuing to struggle with elevated unemployment and businesses hesitant to spend. So far, hot housing markets like Toronto, ON, have shrugged this off, but there's higher risk than normal now of that reversing.”