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The national market can still provide some impetus for home price growth despite declining sales, according to Royal Bank of Canada Senior Economist Robert Hogue.

“Prices are determined by both demand and supply. What we saw in March is that supply came down quite a bit as well,” Hogue said in the April 15 edition of the 10 Minute-Take podcast by RBC Economics. “Sellers in this kind of turbulent environment have decided to wait it out, or maybe they have changed their minds, because they might not get the full value of their property under these conditions.”

Robustness as a fundamental feature of the housing sector was also observed by Royal LePage. Hogue said that while the market couldn’t conduct business as usual due to the pandemic, there were still some notable bright spots.

“In markets like Toronto and Montreal, for instance, prices continued to accelerate relative to February,” Hogue said. “Now, we don’t think that markets will necessarily sustain that kind of acceleration, but nonetheless, the point is that there is still quite a bit of support for prices despite plummeting activity.”

However, Hogue warned that both Toronto and Vancouver might see steeper market declines in April, and that the long-term value of Canada’s homes will depend heavily on the duration of the slowdown.

“Our assumption is that the economy starts to open up again sometime in June. Prices are probably going to stay relatively flat in most cases.” Hogue said. “If lockdown measures and the recession last longer than expected, downward pressure on prices are going to build up across the board.”