OTTAWA, Reuters — Bidding wars and buoyant starts: Canada’s housing market is not buckling under the double-shock of COVID-19 and slumping oil prices, which have crippled the country’s economy and led to a record-high

Home sales rebounded 56.9% in May from the previous month, the weakest April on record, the Canadian Real Estate Association said on Monday. Prices were up 5.3% year-over-year and flat with April, as new listings have plunged, keeping supply tight in many markets.

This follows surprisingly buoyant housing starts released last week, as construction clawed back from April shutdowns.

For Tina Dang and Alex Kean, the COVID-19 pandemic seemed a good time to buy a house in Toronto. But they saw three homes sell in bidding wars in the past month.

“You see headlines all the time saying housing sales are plummeting due to COVID,” said Dang. “But it’s pretty shocking … we’re still in multiple-offers territory.”

Still, economists warn cracks are coming. Immigration, the top driver of new household growth in Canada, has plunged. The short-term rental market has vanished, and falling long-term rents change the outlook for investor owners.

“I can recognize in the short term that prices are sticky and the market psychology has yet to change,” said Royce Mendes, senior economist at CIBC Capital Markets.

“But when I look a few months out, particularly when some of these mortgage deferrals start to wind down … the market could hit a soft patch.”

Indeed, the Canadian Mortgage and Housing Corporation last month said home prices could fall as much as 18% from peak levels amid COVID-19 declines in output, employment, and immigration.

Falling prices could sour the picture for many condo investors, who were banking on price gains to offset low CAP rental rates, said Robert Kavcic, senior economist at BMO Capital Markets.

“If the economics stop making sense … that could force some investors to flip those condos back onto the resale market,” he said.