Ron Matin
The Canadian real estate market is always a hot topic of interest. Whether this is to both homebuyers and sellers. A recent report released by RBC economists shows that the Bank of Canada’s interest rate increase has affected buyers throughout Canada.
Within this blog will inform you more about the effects, and home sales falling in some cities while rising in others. As well as we will delve deeper into the report’s findings.
How interest rates affected different cities
From the BoC, the June interest rate hike was immense in this effect, as well as an expected increase next week. caused buyers to “retreat” in cities such as Vancouver, Toronto, Hamilton and Ottawa according to the RBC report. Surprisingly, on the other hand, buyers remained nearly untouched in places such as: Calgary, Edmonton, Montreal and B.C.’s Fraser Valley.
The report also stated that the supply is continuing to rise in all major markets, which is good news for buyers of all types. However, the growing supply hasn’t done much to ease upward price pressure, and if this is sustained, the pace of property appreciation is expected to slow in the coming months.
A closer look at the statistics
Below is a more in-depth statistical list, including famous places, their percentages from the months, and how it has been affected.
Toronto: Home resales in Toronto jumped at a staggering 32 percent within April and May, unfortunately, fell near a 6.9 percent month-to-month in June. This is despite having more properties on the market.
Prices also continued to rise, with the MLS Home Price Index composite benchmark price up 2.5 percent month-over-month to $1.16 million in June.
- Vancouver: Property values rose 1.3 percent last month after a total combined of 3.1 percent increase in April & May.
- Montreal: With home resales in Montreal still about 15 percent below pre-pandemic levels, a “solid growth in supply” has contributed to an increase in home resales in June.
- Calgary: Calgary saw an immense number of homes on the market in the past three months, with home resales spiking nearly nine percent month-over-month in June from six percent in May.
The affordability issue
In another report published by RBC in late June, home ownership, according to the bank’s metrics, has become slightly more affordable. However, the effects & more are still a major issue. Higher interest rates are poised to keep on having homeownership affordability immensely challenging for buyers. Although the markets in Toronto and Vancouver rebounded in the spring, more balanced conditions point to a slower pace of appreciation in the months ahead.
How the housing market is evolving
The RBC report focused specifically on the latest market trends within the following places: Vancouver, Toronto, Montreal and Calgary. It’s interesting to see how each city is affected, how they will progress by the interest rate hike and how the housing market is evolving in general.
Home resales in Toronto jumped dramatically between April and May, but June saw a decline in sales, the reason being unclear. What makes it more interesting is happening despite more properties on the market compared to April & May. Vancouver saw a slight increase in property values, whilst Montreal is still below pre-pandemic levels but has seen an increase in home resales. Because of this, many sellers are currently on the market to sell homes.
Calgary has seen a significant increase in homes on the market, leading to an increase in home resales. This effect benefits sellers, as increased demand = increased price. This is due to a business term often classified as “Supply & Demand”.
Conclusion: what the future holds
The Bank of Canada’s interest rate increase has had different effects on Canada’s housing market, with home sales falling in some cities while rising in others. The report released by RBC economists shows that higher interest rates are poised to keep homeownership affordability extremely challenging for buyers.
However, the growing supply of homes for sale is good news for buyers. The report’s findings also show that the pace of property appreciation is expected to slow in the coming months.
As the Canadian housing market continues to evolve, both buyers and sellers need to stay up-to-date on the latest trends and market conditions. Whether you’re a buyer or a seller, keep an eye out for any changes and stay informed. Make sure to make the best decisions for your home-buying or selling journey. It’s recommended to get professional help by Contacting MathinHomes to ensure a brilliant move.