Increased activity in the resale housing market did not translate into a wave of newly minted real estate agents and support staff, Mr Mendes said.
“So, while the cooling in market activity will dent the incomes of agents and the profits of brokers, it probably won’t meaningfully delay a return to full employment,” he said.
Mr Mendes said there was not much to fret about from a macroeconomic standpoint. However, a sharp collapse in prices is still a financial stability concern – particularly for those home owners who take on higher debt to buy property.
As the housing market cools and price growth slows, consumers will have more money to use on goods and services unrelated to real estate, Mr Mendes said. Also, as vaccine rollouts continue, businesses will become more confident in the sustainability of the recovery and therefore more willing to make major investments in machinery and equipment, among other things. Canada’s vaccination rate has already surpassed that of the US, with more than 53 per cent of its total population fully vaccinated.
“The reopening that is underway also seems to be coinciding with a slowdown in other components of residential investment,” Mr Mendes wrote. “But, by that same token, companies not doing business in the housing market might also feel more confident making investments rather than stockpiling cash, given that vaccinations have reduced the likelihood of another round of harsh shutdowns.”