TORONTO (CU)_Lockdowns brought about by the COVID-19 pandemic last year prompted an escalation in demand for family homes, as a large number of Canadians decided to move from apartments and condos to houses with more space. This, combined with low interest rates, boosted prices and sales, as was the case in many countries across the globe. However, now with the government beginning to relax lockdown measures and more people going back to working in offices, economists and policymakers have expressed concern over the economic implications of a plunge in the market that is expected as a result of the decline from elevated levels.
There is no doubt that over the past year, the global health crisis changed the forces of economic activity in Canada, as residential investment accounted for a greater share of output than business investment for the first time in about six decades. Nevertheless, one bank economist is of the view that the potential moderation of the housing boom would not hurt the economy as much as many people expect.
“Now that Canadians are leaving their homes…
