For example, the average household has accumulated $ in liquid assets, and Canadians have reduced non-mortgage debt balances.4 In addition, housing activity might be supported by factors that are not directly related to interest rate movements. Specifically, we could also get stronger demographic demand from immigration.
Or some of the increase in housing demand we saw during the pandemic—for bigger housing and in suburban locations—could persist much more than we have factored into our projection. All this might lead to stronger underlying demand growth than in our current projection, despite higher interest rates.