People who pay attention to Canadian real estate probably heard too much of this term already.

It’s pent-up demand.

Depending on who says or hears it, the phrase rouses a variety of reactions.

For many, pent-up demand is music to their ears.

They consider it as a major factor that propelled the housing market to new heights this summer following the spring ravages of the COVID-19 pandemic.

For others who consider real estate in Canada as a Ponzi scheme, pent-up demand represents a good example of fake news.

Some even offered an alternative phrase to argue that the market does not look good. It's 'pent-up supply'. 

Pent-up demand is simply this: buyers and sellers largely stayed away from the market last spring because of uncertainties brought about by the pandemic. Then they returned in force in the summer.

RBC Economics has issued a new housing report, and well, it has a lot to say about pent-up demand.

“With pent-up demand now largely exhausted, we see activity cooling later this fall,” economist Robert Hogue wrote.

This leads to one inevitable conclusion.

According to Hogue, the rally posted by the real-estate market this summer will “lose momentum this fall”.

“The pent-up demand created this spring proved a powerful driver of activity. Question is: how much longer can it be such a dominant factor?” Hogue asked.

Answering the same question, the RBC economist wrote: “We think there’s probably little pent-up demand left to satisfy in most markets.”

How much?

“Perhaps just enough to keep the heat on in September but not much beyond that,” Hogue stated.

The economist recalled that home resales hit a record high in August, rising 6.2 percent from July.

The benchmark price of homes in Canada increased 9.4 percent year over year last month.

The price growth surpassed the eight percent record in July, and 5.7 percent before the COVID-19 pandemic pandemic in February.

With the market cooling in the fall, the economist noted that this will likely “let some of the steam out of prices though not to the point of causing outright declines on a large scale”.

“All signs point to still-higher prices in the near-term,” according to Hogue.

Hogue explained that “tight demand-supply conditions in the majority of markets” will “keep the balance tilted toward faster price increases (or slower price declines in Calgary’s case) in the coming months”.