What’s affecting Canada’s real estate and housing market?
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Loading... - Daisy Murray
- 20 Mar 2023
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Thinking about buying or selling a home in Canada? These seven factors will shape the housing market this year.
For real estate, spring is typically a busy time. Many home owners list their houses for sale at this time to capitalize on the warmer weather and the spike in interest from prospective buyers, many of whom hope to get settled into new homes before the fall, when sales activity picks up once again. (Who doesn’t want to host the holidays in a brand new home?)
Is now a good time to buy or sell your home?
The answer depends on a lot of factors. Before we get into market conditions, though, let’s all agree March is a bad time to predict what will happen in Canadian real estate.
March 2020: COVID-19 lockdowns begin. Enough said.
March 2021: The Canadian Real Estate Association (CREA) forecasts the national average home price will hit $665,000 in 2021 and $679,341 in 2022. The average price reached $716,828 the following month.
March 2022: After peaking in February, home prices and home sales fall as the Bank of Canada (BoC) increases its benchmark rate for the first time in 2022. One or two more rate hikes should do it though, right? Right?
Where is Canada’s housing market headed in 2023?
In March 2023, the outlook is about as certain as it’s been the last three years. Predicting where the real estate market will go is incredibly difficult. Here are seven factors at play.
1. The BoC’s benchmark rate
On March 8, after a year of rate hikes that saw the Bank of Canada’s key lending rate rise from 0.25% to 4.5%, the Bank decided to press pause—welcome news for anyone shopping for a mortgage or paying variable interest on a loan. However, uncertainty persists here and south of the border. On March 7, Jerome Powell, chair of the Federal Reserve in the United States, talked about potentially needing to raise rates faster and higher than previously anticipated. However, the collapse of U.S.-based Silicon Valley Bank (SVB) on March 10 put the Fed’s plan back into question. In Canada, news of SVB’s failure sent government bond yields falling. Suddenly, there’s once again talk of rate cuts being in the cards for 2023. Read More…
