Bank of Canada Raises Key Interest Rate For The 10th Time Since March 2022

Bank of Canada Raises Key Interest Rate For The 10th Time Since March 2022

OTTAWA –

The Bank of Canada has raised its policy interest rate again, making the cost of borrowing more expensive.

The 25 basis points hike brings the Bank’s overnight rate to 5 per cent, the highest it’s been since 2001.

In its Monetary Policy Report, the Bank of Canada says the rate increase was necessary to help slow economic growth and reduce core inflation. Three-month rates of core inflation have been higher than the Bank’s expectation hovering around 3.5 per cent to 4 per cent since September 2022.

“The stubbornness of core inflation in Canada suggests that inflation may be more persistent than originally thought,” the Bank’s Monetary Police Report states.

Since the Bank of Canada started raising rates in March 2022 inflation has dropped from a peak of 8.1 per cent last summer to 3.4 per cent in May. This is the 10th interest rate hike since March 2022.

While the Bank acknowledges inflation has been declining due to falling energy prices, easing supply constraints and interest rate hikes, it predicts inflation will remain elevated around 3 per cent over the next year. The Bank says economic growth isn’t slowing as quickly as expected, citing more momentum for demand and stronger than anticipated consumer spending in the first quarter of 2023.

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Home Prices Continue To Rise in Metro Vancouver’s Housing Market To Kick Off The summer

Home Prices Continue To Rise in Metro Vancouver’s Housing Market To Kick Off The summer

July 05, 2023

Continuing the trend that has emerged in the housing market this year, the benchmark price for all home types in Metro Vancouver increased in June as home buyer demand butted up against a limited inventory of homes for sale in the region.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,988 in June 2023, a 21.1 per cent increase from the 2,467 sales recorded in June 2022. This was 8.6 per cent below the 10-year seasonal average (3,269).

“The market continues to outperform expectations across all segments, but the apartment segment showed the most relative strength in June,” Andrew Lis, REBGV’s director of economics and data analytics said. “The benchmark price of apartment homes is almost cresting the peak reached in 2022, while sales of apartments are now above the region’s ten-year seasonal average. This uniquely positions the apartment segment relative to the attached and detached segments where sales remained below the ten-year seasonal averages.”

There were 5,348 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2023. This represents a 1.3 per cent increase compared to the 5,278 homes listed in June 2022. This was 3.1 per cent below the 10-year seasonal average (5,518).

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SURPRISING REBOUND: METRO VANCOUVER RESALE MARKET DEFIES EXPECTATIONS IN JUNE

SURPRISING REBOUND: METRO VANCOUVER RESALE MARKET DEFIES EXPECTATIONS IN JUNE

In June, the Metro Vancouver resale market continued to surprise on the upside, with rebounding sales activity and month-over-month benchmark price appreciation. Despite a hike to the overnight interest rate on June 7, which caught many off-guard, buyers are showcasing their long-term confidence in Vancouver real estate. There is still a willingness to enter a complex market that is experiencing impacts from several external sources.

GREATER VANCOUVER

2,988

SALES

                                                                                          ————————

-12.4%

MOM%

                                                                                          ————————

+21.1%

YOY%

————————

+1.3%

MOM BENCHMARK %

                                                                                        ————————

GREATER VANCOUVER RESALE MARKET DEFIES SEASONAL TRENDS WITH A CONTINUED PRICE SURGE

The Greater Vancouver resale market notched its sixth consecutive monthly price increase in June, despite an elevated rate environment and a shift into the Summer season that typically sees sales slow. In particular, condominium prices have now nearly returned to 2022’s peak – showcasing the strength and speed of the recovery thus far.

Residential home sales in the region reached 2,988, a significant 21.1% increase compared to June 2022, but are still 8.6% below the 10-year seasonal average of 3,269 sales. On the supply side, inventory levels remain a key challenge for the market, with 9,990 properties listed for sale in June. This represents a 7.9% decrease compared to the previous year, and a 17.4% drop below the 10-year seasonal average.

This ongoing mismatch between buyer demand and inventory levels is reflected in the sales-to-listings ratio, which was 31.4% for June 2023. Significant upward price pressure is expected to persist at these levels, with further gains in the HPI benchmark price expected in July.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,203,000, a 2.4% decrease from June 2022, but a 1.3% increase from May 2023.

SALES TO LISTING RATIO

31%

ALL PROPERTY TYPES

        ————————

39%

TOWNHOUSE

 

————————

 

39%

CONDO

21%

DETACHED

 

FRASER VALLEY

1,935

SALES

                                                                                   ——————————-

+13.1%

MOM %

                                                                                   ——————————-

+51.1%

YOY%

                                                                                    ——————————-

+2.1%

MOM BENCHMARK %

                                                                                  ——————————-

RISING PRICES AND LOW INVENTORY POINTS TO A HEATED SELLER’S MARKET IN THE FRASER VALLEY

Parallelling many of the themes North of the Fraser, the Fraser Valley real estate market experienced solid sales activity in June, returning to levels consistent with the 10-year monthly average. Overall, the region recorded 1,935 sales, marking a significant 51.1% increase compared to June 2022 and a 13.1% increase compared to May 2023, which contradicts usual summer patterns.

In terms of supply, the FVREB received 3,424 listings in June, reflecting a 2.8% increase compared to the previous year but a 3.1% decrease compared to May 2023. Despite gains in inventory levels in recent months, there still needs to be more active listings to meet current demand levels. Consequently, the sales-to-listings ratio was 37%, up 3% from the previous month, and suggesting a heated seller’s market.

These dynamics have supported the prevailing trend of rising prices in the Fraser Valley. June saw the fifth consecutive price increase of 2023, appreciating 2.1% month-over-month to an overall benchmark price of $1,040,900.

SALES TO LISTING RATIO

33%

ALL PROPERTY TYPES

 

59%

TOWNHOUSE

46%

CONDO

30%

DETACHED

 

——————————————————————-

 

GREATER VICTORIA

705

SALES

                                                                                          ————————-

-9.0%

MOM%

                                                                                          ————————

+15.2%

YOY%

                                                                                            ————————

INVENTORY INCREASE SIGNALS POSITIVE SIGNS IN VICTORIA’S REAL ESTATE MARKET

The Victoria Real Estate market saw steady performance in June, with 705 properties sold, a 15.2% increase from June 2022 but a 6.6% decrease from the previous month. Per VREB Chair Graden Sol, this is a return to a more traditional seasonal sales cycle – with a peak in Spring followed by a reduced but stable Summer market.

Inventory rose by 7% compared to May 2023, with 2,342 active listings, a positive sign in a market that has seen depressed listing activity. Despite this, the overall sales-to-listings ratio remains at an elevated 30.1% – indicating a similarly tight market as seen in the Lower Mainland.

In June, benchmark prices in the region were $1,310,100, a 1.0% increase from the previous month, but remaining 7.0% down year-over-year.

 

Credit to: MLA Canada Newswire, July 6, 2023

Vancouver And Toronto Are Never Going To Be “Affordable,” So Now What?

Vancouver And Toronto Are Never Going To Be “Affordable,” So Now What?

PUBLISHED: 2:28 PM JUN 21, 2023

Last month, economists at the Bank of Montreal released a report on Canada’s “affordability conundrum” that delivered some sobering news for anyone paying attention.

Despite “a significant price correction” across most of Canada, affordability remains elusive — and is unlikely to gain traction any time soon. The authors also underscored their long-held position that more housing supply will not be the fix we need to address the housing crisis.

So instead of asking when we might see market housing become affordable again, is it time to ask — at least in certain urban markets — if it’s time to accept high prices as the new normal? If we accept that reality, say some experts, then we can have an honest discussion about the need for subsidized housing and alternative forms of ownership, and acknowledge that any additional market supply will not reduce prices.

After all, even when we do see price drops in Vancouver and Toronto, they are negligible, not near enough to resume the affordability of a decade ago.

The general rule is that housing is affordable when it accounts for no more than one-third of one’s gross income. On June 1, the National Bank of Canada released its quarterly affordability monitor, which showed mortgage payments as a percentage of one’s income had reached nearly 61% nationwide in the first quarter. That’s a drop of 3.2% from the previous quarter, which doesn’t seem like much. And it comes after having reached the most unaffordable level in more than 30 years.

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Housing Affordability Will Deteriorate Unless We Act Soon: CMHC Chief Economist

Housing Affordability Will Deteriorate Unless We Act Soon: CMHC Chief Economist

When Bob Dugan surveys the future of Canada’s housing market, he doesn’t see the rosy picture many long for. 

“I’m actually worried that affordability is going to deteriorate rather than improve unless we can do something about it,” the chief economist at Canada Mortgage and Housing Corporation told The Canadian Press on Friday.

A day earlier, the country had learned from the Canadian Real Estate Association that the actual national average home price was $729,044 in May, up 3.2 per cent from a year earlier, while the seasonally adjusted average home price was $715,290, up 2.7 per cent from April. The average topped $1 million in the Greater Toronto Area and several parts of B.C.

Dugan’s feelings about the lack of affordability have been festering within the federal housing agency for some time, prompting it to ring alarm bells last summer, when it revealed the country needed to build 3.5 million more homes than it is on track for to reach some semblance of affordability.

A year later, the situation looks no better. Some 271,000 homes were built two years ago and roughly 260,000 last year, Dugan said.

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Beedie Unveils Fraser Mills Master-Planned Community in South Coquitlam

Beedie Unveils Fraser Mills Master-Planned Community in South Coquitlam

By Rob MacDougall, June 12, 2023

Located along the banks of the Fraser River in South Coquitlam, Fraser Mills will be the city’s first and only waterfront community. When complete, this 96-acre neighbourhood will be home to a collection of residences, restaurants, shops, extensive green space, plazas, and an aquatic and community centre. As a new landmark in the region, Fraser Mills will shape the future of Coquitlam and become a legacy milestone community for Beedie.

Beedie’s integrated team has envisioned a community in the spirit of the working river it runs alongside. Fraser Mills will celebrate the historic and cultural significance of the village that was built around the thriving sawmill. Masterplan partnerships include the City of Coquitlam, TransLink, Perkins & Will, Perry + Associates, and Bunt & Associates.

“WE ARE INCREDIBLY EXCITED TO BRING FRASER MILLS TO LIFE. AS COQUITLAM’S FIRST AND ONLY WATERFRONT COMMUNITY, THE PRIME LOCATION ON THE RIVER OFFERS A VIBRANT MIX OF HOMES, WORKPLACES, AND PUBLIC SPACES THAT CATER TO EVERY STAGE OF LIFE.”

– RYAN BEEDIE, PRESIDENT.

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Bank Of Canada Raises Interest Rate For First Time Since January, Now 4.75%

Bank Of Canada Raises Interest Rate For First Time Since January, Now 4.75%

The Bank of Canada (BoC) put an end to its rate pause on Wednesday, announcing another 0.25% increase to its policy rate, bringing it up to 4.75%.

This marks the first rate hike since January, and follows two consecutive pauses from the bank as they waited to see how their already-implemented increases worked to tamp down inflation. Going into the rate announcement, experts were uncertain about what to expect, with a recent report from Desjardins calling it “almost a coin flip at this point.”
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Competition Heats Up Among Buyers As Summer Arrives

Competition Heats Up Among Buyers As Summer Arrives

While the year started slower than usual, Metro Vancouver’s1 housing market is showing signs of heating up as summer arrives, with prices increasing for the sixth consecutive month.

Sales

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 3,4112 in May 2023, which is a 15.7 per cent increase from the 2,947 sales recorded in May 2022, and a 1.4 per cent decline from the 10-year seasonal average (3,458).
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BC Gov Expands Speculation and Vacancy Tax to New Areas

BC Gov Expands Speculation and Vacancy Tax to New Areas

On Friday, the Province of British Columbia announced that it has expanded the Speculation and Vacancy Tax (SVT) to several new areas of BC for the 2023 tax year.

Those new areas include the municipalities of North Cowichan, Lake Cowichan, Duncan, Ladysmith, Squamish, and Lions Bay — the same municipalities the Province said the SVT would potentially expand to back in July 2022.
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