New listings, higher property prices and a war in the Ukraine.
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It has been a huge month in the market. I have seen the property prices jump to higher levels, with the detached home market showing a growth of 39.1% year on year, the condo market showing an increase of 51.3% and the townhouse market showing 37.8%. And we all wonder how much higher the prices can go. It has been a welcomed site to see new listings come on the market and the interest rate increase.
“Although the market is still far from balanced, it is encouraging to see new listings increase again for the second month in a row,” said Fraser Valley Real Estate Board President, Larry Anderson.“We’re hopeful that this trend will be sustained leading into the spring season as more sellers come on stream to help soften the market and provide opportunities for the many buyers who’ve been sidelined over the past year and a half.
Baldev Gill CEO of the Fraser Valley Real Estate Board, said ,” supply fundamentals continue to be the number one issue facing real estate markets in all regions across the province. Until there is a concerted effort to address inventory, buyers will continue to face challenging market conditions.”
As widely expected, key lending rate inches up to 0.50 percent with the first increase since 2018. It won’t be the last this year, analysts say.
The Bank of Canada (BOC) raised its key overnight lending rate March 2 by .25 basis points to 0.50 percent, the first time the rate has increased since 2018 and the first time it has been above 0.25 percent in two years. This increase is the first of a series of anticipated hikes that some analysts believe could see the overnight rate rise by 175 basis points by the end of 2022 as the BOC attempts to control a rise in inflation, which increased to 5.1 percent in January.
Sherry Cooper, chief economist with Dominion Lending Centres, which has mortgage brokerage offices across Canada, expects another 0.25 percent BOC rate increase on April 3. “The increased uncertainty and volatility arising from the war in Ukraine is front of mind worldwide,” Cooper said, calling the BOC’s gradual rate increases “a prudent move in the face of geopolitical uncertainty.”
I am hopeful that we can start to move toward a balanced market with the increase of listings and interest rates. We have been in the longest Seller’s market that I have seen in my career.
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