With all the talk about the economy and the housing market, the question everyone is asking is how long will 'it' (= the current hot real estate market) last. Not forever according to the Bank of Canada Governor Mark Carney. And that's good news for Buyers and Sellers. A balanced market where supply equals demand, price increases are modest and sustainable. 

The economy grew at the fastest pace in more than a decade between January and March but will slow between now and 2012 as the housing market cools, the dollar trades near parity and the impact of government stimulus spending fades in Canada and the United States, the Bank of Canada said in its latest forecast.

The central bank’s projections flesh out a statement made two days ago by Governor Mark Carney, in which he kept his benchmark lending rate at an historic low but, citing hotter-than-anticipated core inflation and ``front-loaded” growth, hinted he could start raising borrowing costs as soon as his next policy decision on June 1.

``The economic recovery is proceeding somewhat more rapidly than expected,” Mr. Carney and his governing council said in their April Monetary Policy Report. ``Although some slowing is anticipated from the rapid pace registered early in the year, consumer spending is expected to grow robustly throughout the projected horizon, aided by an accommodative monetary policy, gains in employment and labour income, and improved consumer confidence.’’ Gross domestic product expanded at a 5.8-per-cent annual rate in the first quarter – the most since the fourth quarter of 1999 – the central bank said, significantly revising its 3.5 per cent forecast from January.

Full Globe and Mail article.