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Canada’s five-year fixed mortgage rates fell around roughly 100 basis points from the turn of the year to recent lows, which analysts believe was behind the rebound in the housing market. Buying activity rose another 0.6 per cent in September to 512,000 units (seasonally-adjusted and annualized) — the highest level in 21 months and 6.6 per cent above the 10-year average.

Royal Bank of Canada senior economist Robert Hogue notes that conditions are ripe for another rally in housing prices after a pause earlier in the year.

“Demand-supply conditions have tightened up, and are gradually heating up prices. Low interest rates, strong labour markets and rapid population growth will continue to fuel demand in the period ahead,” said Hogue in a report. “Promises made during the federal election campaign could heat things up further.”

The influx of immigrants will also see demand for residential units soar. A new report by Royal Le Page out this morning says newcomers — those who arrived in the country within the past 10 years — already represent one in every five home buyers in the country.