As summer sadly draws to a close, one of Canada’s top economists is forecasting the nation’s housing market could see things heat up.

Citing recent CREA numbers, Douglas Porter, chief economist for BMO Capital Markets, said while some predicted a downturn of varying degrees for the nation’s housing sales, the question now isn’t how low sales will fall but rather how high they’ll climb.

“Just when you thought it was safe to go back in the water, Canada’s housing market seems to be warming up again,” said Porter. “At the start of 2013, the only debate on Canadian housing was whether it would have a hard or soft landing. In fact, recent data suggest that the market may not have ‘landed’ at all, and instead is in the process of possibly taking off again.”

According to the numbers cited by Porter, several of the country’s biggest markets have seen double digit yearover- year increases in existing home sales, including Calgary (17 per cent), Toronto (16 per cent), Edmonton (25 per cent) and Vancouver, where sales have shot up by an astounding 40 per cent in the last year.

Recently, the Canada Mortgage and Housing Corporation announced further tightening in mortgage regulations, limiting the maximum amount of guarantees on mortgage backed securities. While this could put additional upward pressure on mortgage rates in the coming months. Porter doesn’t see a move anytime in the near future.

“The Bank of Canada is unlikely to shift gears due to a firmer housing market alone; after all, the July sales spike may well be a short-term blip in response to the rise in long-term mortgage rates in June. However, one of the pre-conditions for the Bank maintaining low interest rates is the continued ‘constructive evolution’ of household debt,” he said.

In July, residential MLS® sales in Calgary totaled 2,268 units in July, a 17 per cent increase over the previous year and up more than six per cent so far this year.

Another signal of strength in the market, both in Calgary and across Canada, has been a reacceleration in prices. In Calgary, prices are nearly seven per cent higher than levels recorded in July 2012, and the national average was up almost 5 per cent year-over-year in June.