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Canada's housing market, as reported by the Canadian Real Estate Association (CREA), is exhibiting signs of resurgence despite facing record-high interest rates. CREA Chair Larry Cerqua acknowledges this shift, attributing it to pent-up demand. The data from CREA indicates a 3.7 per cent increase in home sales activity between December 2023 and January 2024, suggesting a recovery from the market's sluggish performance in previous years. Although sales have risen, they still hover around nine per cent below the 10-year average, signaling room for further growth.

Key regions driving the national sales surge include the Greater Toronto Area, Hamilton-Burlington, Montreal, Greater Vancouver, Fraser Valley, Calgary, and various markets in Ontario's Greater Golden Horseshoe and cottage country. Notably, January 2024 witnessed a 22 per cent increase in transactions compared to the previous year, the largest year-over-year gain since May 2021. However, CREA attributes this substantial rise partially to the low activity levels experienced in January 2023, which marked one of the slowest starts to the year in decades.

Meanwhile, the Bank of Canada has maintained a five per cent key lending rate since July, aiming to counter inflation that peaked at 3.4 per cent in December. Bank Governor Tiff Macklem emphasized that while interest rates influence inflation, they have limited impact on housing affordability. Analysts speculate that pent-up demand, housing shortages, rising rents, and the prospect of interest rate reductions may further buoy the housing sector. Measures by the Ottawa government to bolster housing supply, such as reviving a wartime housing program, indicate efforts to address market challenges. However, questions linger about the sustainability of these market dynamics, particularly in light of fluctuating interest rates and their potential impact on home prices.

Read the full article on: Global NEWS