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Will the Bank of Canada’s Rate Cut Really Boost the Housing Market?

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The Bank of Canada has officially lowered its benchmark interest rate to 2.75%, marking its seventh consecutive cut. While this move is expected to provide some relief for homeowners renewing their mortgages, experts remain skeptical about whether it will truly stimulate homebuying activity in today’s sluggish housing market.

Lower Rates, But Are Buyers Ready?

Historically, lower interest rates have encouraged borrowing and real estate activity. However, experts argue that this latest cut may have limited impact on the market. Mortgage rates are still more than double what they were in 2020 and 2021, when borrowers locked in historically low rates below 2%. Many of those homeowners are now facing significantly higher costs as they renew their mortgages, adding strain to household budgets.

“The impact will be limited,” says Rebecca Oakes, Vice President of Data and Analytics at Equifax Canada. “Many borrowers who locked in at historically low rates are still renewing at significantly higher interest costs, which continues to strain household budgets.”

Uncertainty Keeping Buyers on the Sidelines

Despite the lower rates, homebuyers remain hesitant due to broader economic uncertainty. The ongoing global trade war and rising costs of goods have created a “wait-and-see” approach among both buyers and sellers.

“There is a lot of uncertainty,” explains Samantha Villiard, a regional vice president with Re/Max Canada. “That has prompted households to take a cautious approach.”

Fellow Re/Max VP Kingsley Ma agrees, stating that many would-be homebuyers and sellers are choosing to wait for the economy to stabilize before making any major financial decisions. He adds that a small 25-basis-point rate cut is unlikely to be a deciding factor for buyers.

“If you lose your job, you won’t be able to pay your mortgage—so it doesn’t matter if interest rates are lower,” Ma points out.

Mortgage Renewals & Rising Delinquencies

For homeowners who have renewed their mortgages in the past year, affordability remains a challenge. According to Equifax, Ontario’s mortgage delinquency rate—the percentage of homeowners missing mortgage payments for at least 90 days—nearly doubled in the final quarter of last year, reaching 0.22%. While lower rates may slow the rate of delinquencies, they won’t erase the financial pressures that have built up over time.

Will Fixed-Rate Mortgages Drop?

While variable-rate mortgages tend to move in sync with the Bank of Canada’s benchmark rate, fixed-rate mortgages are tied to government bond yields. Following the latest rate cut, bond yields actually increased, which could limit how much fixed mortgage rates decline.

“This is a key reason why I don’t believe mortgage rates will come down materially enough to eliminate renewal risks,” says Carl Gomez, Chief Economist at CoStar Group. “There was a promise that lower interest rates would reduce mortgage rates—but fixed rates haven’t dropped significantly.”

Housing Affordability Still a Major Challenge

Even with lower borrowing costs, home prices remain out of reach for many Canadians. The average home price in Canada sat at $709,200 in January 2025, according to the Canadian Real Estate Association (CREA). While prices are slightly lower than their peak in 2022, they are still 33% higher than in early 2020, when the Bank of Canada first slashed interest rates to nearly zero.

Gomez stresses that affordability remains a huge barrier, with high mortgage rates making homeownership less accessible for first-time buyers.

What’s Next for the Housing Market?

The latest rate cut is good news for existing homeowners looking to renew their mortgages at slightly lower rates. However, the broader housing market remains in a holding pattern, with economic uncertainty and affordability challenges keeping many buyers and sellers on the sidelines.

Will further rate cuts in 2025 make a bigger impact? That remains to be seen. For now, the housing market is far from a full recovery, and homebuyers will need more than just lower interest rates to regain confidence.

Could a Trade War Actually Make Housing More Affordable in Canada?

Oleg First time buyers, For Buyers, For Sellers, News, Opinion, Statistics, Videos

The Canadian housing market has been a hot topic for years, with skyrocketing prices making it increasingly difficult for young buyers to enter the market. But what if an economic shift—such as a trade war—could change that? While it may sound counterintuitive, there are several ways a U.S.-Canada trade war could impact housing affordability, and not all of them are bad for first-time buyers.

The Three Key Factors of Housing Affordability

Housing affordability is influenced by three major factors: mortgage rates, home prices, and income levels. If a trade war triggers economic uncertainty, these factors could shift in ways that make homeownership more attainable for some buyers.

1. Mortgage Rates Could Drop Further

The anticipation of economic instability has already put downward pressure on mortgage rates. If a full-fledged trade war erupts, the Bank of Canada may cut interest rates further to stimulate the economy. Lower mortgage rates mean cheaper borrowing costs, making it easier for buyers to afford a home.

2. Home Prices Could Stagnate or Decline

Historically, economic downturns have led to stagnant or falling home prices. This could be bad news for baby boomers looking to downsize, but for young buyers struggling to afford a home, it might be the break they’ve been waiting for. If prices level off or decline while mortgage rates remain low, homeownership could finally become a reality for many first-time buyers.

3. Wage Growth and Economic Stability

One potential downside is that a trade war could slow down wage growth and increase job uncertainty. While mortgage rates and home prices may become more favorable, a weak job market could make it harder for some to qualify for loans or feel confident in making such a major financial decision. However, for those with stable employment, this could be a once-in-a-lifetime opportunity to buy in a softer market.

The Big Question: Is This an Opportunity?

For young buyers, a trade war could create a rare window to enter the housing market before prices climb again. While economic instability isn’t ideal, those with secure jobs and long-term plans may find that lower prices and better mortgage rates outweigh the risks.

What Should You Do?

If you’re considering buying a home in Vancouver or anywhere in Canada, it’s crucial to stay informed and work with an experienced real estate professional. Timing the market can be tricky, but understanding these economic trends can help you make the right decision.

💬 What do you think? Could a trade war actually help young buyers? Share your thoughts in the comments below or reach out for expert real estate advice!

For personalized real estate guidance in Vancouver, contact me today!

Vancouver Real Estate Market Outlook for 2025

Oleg First time buyers, For Buyers, For Sellers, Market update, News, Statistics, Videos

British Columbia’s housing market is set for a year of mixed results in 2025. While resale activity is expected to rebound after years of slowdown, the rental market will likely experience softening with higher vacancy rates. Meanwhile, new home construction is projected to see only marginal growth as demand for presale units gradually returns.

Regional Overview: How Population Growth is Shaping the Market

Slower population growth in British Columbia is expected to have a significant impact on housing demand. Economic growth is anticipated to be sluggish in early 2025, with employment conditions weakening until mid-year before rebounding in 2026 and 2027. While wages and disposable income have seen strong growth in recent years, they are expected to remain flat in 2025, affecting affordability and purchasing power.

Additionally, changes to Canada’s immigration policy will influence housing demand. Metro Vancouver remains a top destination for international migrants, but overall net migration is expected to slow. Meanwhile, high housing costs will continue driving some B.C. residents to seek more affordable options in areas like Chilliwack, Victoria, and Kelowna. Interprovincial migration trends suggest a growing number of British Columbians moving to the Prairie provinces in search of lower-cost housing.

Resale Market: A Rebound on the Horizon

After two years of declining sales, Vancouver and Victoria’s resale markets are poised for a turnaround in 2025. Lower mortgage rates are expected to expand borrowing capacity, allowing more buyers to enter the market. While sales in 2025 are projected to increase, they will likely remain below the highs seen in 2021.

Recent reductions in interest rates began to impact resale activity in late 2024, with stronger sales compared to the previous year. This trend is expected to continue, leading to increased demand and upward pressure on home prices. However, the effects of slowing immigration will be more pronounced in the rental market than in resale activity, with the biggest impact concentrated in Metro Vancouver.

Home Prices: A Year of Growth Followed by Stabilization

Increased sales activity will help absorb existing inventory in the form of unsold new homes and active resale listings. The average time homes spend on the market is expected to decline slightly after increasing over the past two years. This will contribute to a more competitive market, leading to price growth primarily in 2025, followed by marginal increases in the years beyond.

Higher borrowing capacity—enabled by wage growth and low mortgage rates—will support home price appreciation. Additionally, investor activity is expected to pick up, particularly in the presale market, as expectations for price growth return.

New Home Construction: Modest Growth Expected

Housing starts in Vancouver and Victoria are projected to increase slightly in 2025 after a sluggish 2024. The growth will be led by multi-unit developments, particularly in the rental sector, driven by government incentives and historically tight rental conditions. However, as more rental supply enters the market, developers may become cautious due to rising vacancy rates and slowing rent growth, which could limit new rental projects in the coming years.

Condominium construction remains challenging due to pricing pressures and weaker presale demand. Many projects have been delayed due to high unabsorbed inventory, with developers taking out additional financing to manage existing units. While lower mortgage rates and increased resale activity may help revive stalled projects, demand for high-priced presale units remains uncertain, particularly in Vancouver’s core.

Single-detached home construction is also expected to recover in 2025, supported by lower interest rates. However, long-term growth in this segment will be constrained by land shortages and high development costs.

Rental Market: Higher Vacancy Rates and Slower Rent Growth

The rental market in British Columbia is expected to see a significant increase in vacancy rates after years of historically low levels. This trend began in 2024 and is projected to continue as a record number of rental units enter the market. Many of these units will be priced at higher rents, potentially slowing absorption rates.

Lower population growth, particularly among new immigrants who typically enter the rental market first, will further dampen demand. While rental prices will continue rising due to the introduction of high-priced units, asking rents may face downward pressure as landlords compete for tenants. This could lead to improved affordability and increased tenant turnover as the gap between occupied unit rents and new rental prices narrows.

Key Takeaways for 2025

  • Resale Market: Sales activity will rebound due to lower mortgage rates, pushing prices to new highs by the end of the year.
  • New Construction: A modest recovery is expected, but long-term growth remains uncertain due to affordability constraints and land shortages.
  • Rental Market: Rising vacancy rates and slowing rent growth will ease pressure on renters, though newly built units may struggle with absorption.
  • Regional Trends: Metro Vancouver will continue to lead the province in housing activity, while more buyers seek affordability in areas like Surrey, Burnaby, and Victoria.
  • Government Policy: The increase in the insured mortgage price limit from $1 million to $1.5 million will boost sales, particularly for townhomes, benefiting dual-income households.

Looking Ahead

While 2025 will bring renewed activity in B.C.’s housing market, long-term challenges remain. Rising inventory levels, affordability concerns, and shifting migration trends will shape the future of real estate in the province. Whether you’re looking to buy, sell, or invest, staying informed on these trends will be crucial in making the right decisions in an evolving market.

For more insights on Vancouver and B.C.’s real estate market, subscribe to our updates and stay ahead of the latest trends!

Vancouver Enters the ‘Big Leagues’ of Development with Market Rental Housing Strategy

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The City of Vancouver is taking a bold step in tackling the housing crisis by launching a market rental housing strategy that could redefine urban development in Canada. Announced by Mayor Ken Sim, the plan involves building 4,300 market rental units on five city-owned sites, with the goal of creating long-term revenue to support affordable housing and community infrastructure.

A New Approach to Housing Development

Unlike traditional housing projects that rely on private developers, this initiative positions the City of Vancouver as both the landowner and developer—a first-of-its-kind move in Canada. While the city has previously used this model for non-market housing, this marks the first major venture into market rentals.

The Vancouver Housing Development Office (VHDO), established in 2023, will oversee the project. Two of the five proposed sites are located in downtown Vancouver, with others situated in Kingsway (2400 Motel site), Marpole, and Main & Terminal.

“This is about leveraging our land not only to deliver much-needed market rental housing but also to pilot a new way to generate non-tax revenue for the city,” said Mayor Sim. The additional revenue is expected to fund community centers, the Vancouver Affordable Housing Endowment Fund, and other city initiatives.

Balancing Public and Private Interests

City officials have emphasized that this strategy is about financial sustainability. The $6 billion property endowment fund, originally established in 1975, will play a key role. The goal is to generate consistent returns to fund public services, moving beyond the traditional model of relying solely on taxes and developer contributions.

“There is another definition of public benefit—the ongoing income stream coming in,” said Grace Cheng, the city’s director of long-term strategy and planning. This means funds could be allocated to renewing libraries, improving water and sewer infrastructure, or enhancing other public services.

The Financial Impact: Billions in Play

While the cost of development is yet to be finalized, city officials estimate that the project’s financial impact will be in the billions.

“The first task is to get these sites zoned for highest and best use under market rental tenure,” said Brad Foster, director of market rental housing at VHDO. “The next task will be, ‘How do we get them built?’ And that’s where all the finance discussions will take place.”

Deputy city manager Armin Amrolia reinforced this, saying, “This is the big leagues of development, and we aim to not shy away from that.”

Who Can Afford These Rentals?

Once completed, these rental units will be targeted toward middle-income earners, with household eligibility ranging between $90,000 and $194,000 per year, based on today’s market rates. This move is expected to address the housing gap for professionals and working families who often struggle to find affordable housing in Vancouver’s competitive market.

The Future of Vancouver Housing

The five sites designated for this project include:

  • Pacific & Hornby: Two towers (54 and 40 stories) with 1,136 homes.
  • Main & Terminal: Currently a parking lot, planned for redevelopment.
  • Granville Bridge North End: Four proposed towers.
  • 2400 Motel (Kingsway): Major transformation planned.
  • Granville & 67th (Marpole): Another key development site.

This ambitious strategy reflects a “made-in-Vancouver” solution to the housing crisis—one that prioritizes long-term financial stability while increasing rental supply. If successful, it could serve as a model for other cities facing similar challenges.

What’s Next?

The city still needs to finalize zoning, secure development partners, and approve financing agreements before breaking ground. However, officials remain optimistic that this bold initiative will help reshape Vancouver’s housing landscape for the better.

With billions of dollars in play and thousands of new homes on the horizon, Vancouver is stepping into a new era of real estate development—one where the city itself is leading the charge.

Thind Properties Faces Financial Crisis with Multiple Foreclosures and Legal Issues on Maywood, Brentwood, and Other Projects

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Burnaby-based real estate developer Thind Properties is in the midst of a severe financial crisis, facing foreclosure, creditor protection, and multiple lawsuits. The company, headed by founder Daljit Thind, is grappling with unpaid debts on several major projects, including the Maywood development near Metrotown, the Eclipse Brentwood tower, and multiple other ventures in Burnaby, Surrey, and Richmond.

Maywood Development Under Foreclosure

Thind Properties’ troubles began with its acquisition of the Madeira Manor property at 6677 Silver Avenue (4330 Maywood Street) in Burnaby, which was purchased from Kirpal Group in 2024 for $22 million. The project, planned for a 24-storey tower, has now come under foreclosure after the company failed to meet its financial obligations.

The City of Burnaby had previously approved a rezoning plan for the site, with Thind agreeing to assume responsibility for an outstanding density bonus payment of over $5.6 million, plus interest. However, Thind has failed to make any payments on this debt since taking over the property, leading the city to file a lawsuit in December 2024. The total amount owed to the City now exceeds $6.9 million.

On top of this, Thind is facing foreclosure proceedings from multiple lenders, including Bancorp Financial Services and Strandlund Investments, who are owed more than $8 million on a second-ranking mortgage for the Maywood property. If the company cannot pay off this debt, the property could be sold to recover the funds, exacerbating Thind’s mounting financial woes.

Eclipse Brentwood and $189 Million Debt

Thind Properties’ financial struggles extend beyond the Maywood project. The company is also grappling with significant debt related to its Eclipse Brentwood development at 2381 Beta Avenue, a 34-storey tower near Burnaby’s Brentwood Town Centre. Despite being nearly 95% complete, the project has come to a standstill due to financial difficulties.

KingSett Capital, the lender for Eclipse Brentwood, has initiated creditor protection proceedings against Thind, as the company owes $189 million in mortgage debt. This amount continues to accrue interest daily, further compounding Thind’s financial troubles. Additionally, KingSett has uncovered a judgment from the Canada Revenue Agency for over $11 million, further undermining Thind’s cash flow and ability to secure additional financing.

As construction on Eclipse Brentwood has halted, the company is struggling to reinstate home warranty insurance, which is required for the completion of the project. KingSett has stepped in to offer financing to resume construction, but without a clear resolution, the project’s future remains uncertain.

Additional Legal Challenges and Receiverships

Thind Properties is also facing receivership proceedings on several other projects, including the Highline Metrotown tower in Burnaby and the District Northwest development in Surrey. KingSett Capital, which is involved in the receiverships, holds a substantial amount of debt related to these properties as well, totaling approximately $500 million.

In December 2024, Thind Properties was placed under creditor protection in relation to these projects. The company is now scrambling to find a way to navigate its dire financial situation, with the potential sale of assets or restructuring as possible outcomes.

A Developer on the Brink

The ongoing financial challenges of Thind Properties have cast doubt on its ability to recover. With lawsuits, foreclosures, and creditor protection proceedings mounting, the developer’s future remains uncertain. As Thind Properties faces legal and financial scrutiny, it is unclear whether the company can resolve its issues or whether these projects will be taken over by creditors or other developers.

The Maywood, Eclipse Brentwood, and other developments are now mired in a complex web of legal disputes, foreclosure proceedings, and mounting debt, leaving creditors, tenants, and stakeholders in a precarious position. Whether Thind Properties will be able to emerge from this crisis or be forced into liquidation remains to be seen.

Everything you need to know about the new anti-flipping tax in BC

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Understanding the BC Home Flipping Tax: What You Need to Know

The real estate market in British Columbia is set to experience a significant shift with the introduction of the BC Home Flipping Tax. This tax, part of the Homes for People Plan, is designed to discourage short-term property flipping for profit. Let’s break down everything you need to know about this new tax, effective January 1, 2025.

What is the BC Home Flipping Tax?

The BC Home Flipping Tax applies to profits earned from selling residential properties or presale contracts in British Columbia if the property is owned for less than 730 days. The tax is governed by the Residential Property (Short-Term Holding) Profit Tax Act and is separate from federal property flipping rules and other income tax systems.

Key Features of the Tax

  • Effective Date: January 1, 2025.
  • Scope: Applies to residential properties, including housing units and presale contracts.
  • Ownership Threshold: Properties sold within 730 days of purchase are subject to the tax unless an exemption applies.
  • Tax Rates:
    • 20% on profits for sales within 365 days of purchase.
    • Gradually decreases to zero after 730 days of ownership.

Who is Subject to the Tax?

Any individual, corporation, partnership, or trust selling a taxable property within 730 days of purchase may be subject to the tax. This applies to residents of BC as well as individuals or entities outside the province.

Example 1:

  • Property purchased: May 1, 2023.
  • Property sold: January 31, 2025.
  • Tax applies (642 days of ownership).

Example 2:

  • Property purchased: May 1, 2023.
  • Property sold: June 1, 2025.
  • No tax (762 days of ownership).

What Qualifies as a Taxable Property?

  • Residential properties with housing units or those zoned for residential use.
  • Rights to acquire residential properties, such as assignments of presale contracts.

Exclusions:

  • Leasehold interests or properties in exempt locations.
  • Gifts, mortgages, and other transactions that do not involve a transfer of beneficial ownership.

Do You Need to File a Tax Return?

You must file a BC Home Flipping Tax return within 90 days of selling a property if:

  • The property is sold within 729 days of purchase and no automatic exemptions apply.
  • Your exemption requires filing to be claimed.

You do NOT need to file a return if:

  • You owned the property for 730 days or more before selling.
  • Your exemption applies automatically.

Exemptions from the Tax

Certain sales may qualify for exemptions, including:

  • Transfers between related persons.
  • Sales involving primary residences (subject to conditions).

Primary Residence Deduction: If you owned and lived in the property as your primary residence for at least 365 consecutive days, you may deduct up to $20,000 from taxable income.

Example:

  • Sam owned and lived in a property for 20 months before selling. Sam qualifies for the deduction.
  • Amrita owned and lived in a condo for only 6 months. She does not qualify for the deduction.

How is the Tax Calculated?

The tax applies to the net taxable income from the sale of a property owned for less than 730 days. The rate decreases the longer you own the property, with no tax owed after 730 days.

Days of Ownership Calculation:

  • Start counting from the day you purchase the property (typically the closing date).
  • End with the day you sell the property (typically the closing date of the sale).

Impact on Presale Contracts and Related Transactions

  • For presale contracts, the date of purchase is typically when you enter the contract or pay the deposit.
  • Sales between related persons may use the original purchase date of the related seller for tax calculations.

Example 1:

  • A developer enters a presale contract on June 1, 2025, for a condo completed on March 1, 2027.
  • The ownership date for tax purposes is June 1, 2025.

Example 2:

  • Michael buys a property from his father, who originally purchased it in 2020.
  • For tax purposes, Michael’s ownership date is deemed to be the father’s purchase date.

Why Does This Matter?

The BC Home Flipping Tax is a critical measure to curb speculative real estate practices and promote housing stability. If you’re considering selling property in BC, understanding these rules is essential to avoid unexpected tax liabilities.

Stay informed and plan your real estate transactions carefully to navigate these new regulations. For more details, consult a tax professional or visit the official government resources.

 

Buyer Demand Surges in October: Vancouver’s Real Estate Market Sees Significant Uptick

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VANCOUVER, BC – November 4, 2024 – After months of sluggish performance, Metro Vancouver’s housing market saw a sharp increase in buyer demand in October. Home sales surged by over 30% compared to the same month last year, marking a significant shift after sales had been tracking around 20% below the ten-year seasonal average.

According to the Greater Vancouver REALTORS® (GVR), 2,632 residential properties were sold in the region during October 2024, representing a 31.9% jump from the 1,996 sales recorded in October 2023. While this was still 5.5% below the ten-year seasonal average of 2,784 sales, the rebound in activity signals renewed buyer interest after a prolonged period of caution.

Mortgage Rate Cuts Spur Buyer Confidence

Andrew Lis, GVR’s Director of Economics and Data Analytics, attributed the surge in sales to recent reductions in mortgage rates. “Typically, lower mortgage rates boost demand, and the strong sales numbers for October suggest that buyers may finally be reacting to more affordable borrowing costs after sitting on the sidelines for months,” Lis explained. He added that the recovery may have come as a surprise to some market watchers, but after four consecutive rate cuts by the Bank of Canada, the rebound was “only a matter of time.”

Listings and Inventory on the Rise

New listings were also on the rise in October, with 5,452 detached, attached, and apartment properties added to the Multiple Listing Service® (MLS®) system. This represents a 16.9% increase from the 4,664 properties listed in October 2023 and is 20% higher than the ten-year seasonal average of 4,545.

In total, there were 14,477 active listings on the MLS® in Metro Vancouver, a 24.8% jump compared to the same period last year, when 11,599 properties were listed. This figure is also 26.2% higher than the ten-year average of 11,475, giving buyers more options in an increasingly active market.

Sales-to-Listings Ratio Edges Toward Seller’s Market

The sales-to-active listings ratio for October stood at 18.8%, with notable variations by property type. Detached homes had a ratio of 13.4%, while attached homes (22.5%) and apartments (22.2%) moved closer to a seller’s market. Typically, downward pressure on prices occurs when the ratio falls below 12%, while upward price pressure builds when it surpasses 20% over several months.

“Although October’s numbers are encouraging, it’s too early to call it a full-blown trend,” Lis cautioned. “Recent data suggests that the market has been balanced, with prices softening over the past few months. However, with this uptick in sales, particularly in the attached and apartment segments, we could be approaching a seller’s market across all property types. This may signal the end of the recent period of price moderation.”

Price Trends: Modest Declines in Benchmark Prices

Despite the surge in sales, prices remained relatively stable, with modest declines recorded across most property types. The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver was $1,172,200 in October 2024, a 1.9% decrease from October 2023 and a slight 0.6% decline compared to September 2024.

Detached home sales reached 724 in October 2024, a 25.5% increase from the 577 sales in the same month last year. The benchmark price for detached homes was $2,002,900, a 0.3% increase from October 2023 but a 1% drop from September 2024.

Apartment sales soared, with 1,393 units sold, a 33.4% increase year-over-year. The benchmark price for apartment homes was $757,200, down 1.6% from October 2023 and 0.6% lower than September 2024. Attached home sales also saw impressive growth, with 501 sales representing a 40.7% increase compared to October 2023. The benchmark price for townhouses was $1,108,800, a 0.4% increase year-over-year and a 0.9% rise from the previous month.

Where Are Housing Prices, Interest Rates, and the Economy Headed? Insights from Scotiabank’s Chief Economist

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If you’re like most Canadians, you’re feeling the impact of fluctuating interest rates, housing prices, and an economy that’s been anything but predictable. Scotiabank’s Chief Economist, Jean-François Perrault, recently shared his thoughts on these critical topics and offered insights into where we might be heading. Here’s what he had to say—and what it could mean for all of us.

The Interest Rate Rollercoaster: Are More Cuts Coming?

The Bank of Canada has already slashed interest rates to counter slow inflation, but is more easing on the horizon? According to Perrault, there’s a less-than-even chance of another deep cut. The recent adjustments were primarily to tackle slower inflation rather than a dire need to stimulate economic growth. Although rate cuts can provide some relief, they aren’t the cure-all, especially if inflation remains low but steady.

In Perrault’s view, rate cuts are more likely to happen if economic activity starts to dip unexpectedly. For now, though, he’s not forecasting drastic measures; he believes that the current rates are generally aligned with Canada’s modest economic recovery.

Housing Prices: What’s the Real Outlook?

Housing prices have been top of mind for many, especially with how volatile they’ve been in recent years. Perrault acknowledges that high interest rates have cooled the market, but he doesn’t foresee any major crashes. Instead, he expects a more balanced market as we move forward. He suggests that while we may not see another explosion of housing price growth, neither should we brace for a steep drop.

His message? Moderate growth is likely, but it’s still a tough market for first-time buyers. Many potential buyers are waiting to see if interest rates will ease further before jumping in, which has kept demand somewhat in check. This pause could maintain stability in prices, though Perrault also notes that local variations—like in Toronto and Vancouver—will likely continue as supply and demand fluctuate.

The Broader Economic Picture: Stability or More Turbulence?

On the bigger picture, Perrault believes Canada’s economy is positioned to recover gradually. He predicts modest GDP growth, between 1.3% and 2.1%, and expects inflation to remain close to the Bank of Canada’s 2% target. It’s a cautiously optimistic outlook, with the potential for steady, if unspectacular, growth.

One significant factor is Canada’s low unemployment rate, which suggests underlying resilience in the economy. While growth is slow, low unemployment can support stable consumer spending, which is essential for economic health. Perrault argues that while we might not see rapid growth, the combination of steady employment and gradual inflation control bodes well for stability.

What Does This Mean for Canadians?

For Canadians, the takeaway is to plan for a relatively stable, if slow-growing, economic landscape. Homebuyers might not see dramatic changes in prices or rates, but there could be smaller adjustments, especially if inflation nudges the Bank of Canada to reconsider rate changes. For those looking to make significant financial decisions, caution and careful planning remain key.

Perrault’s insights reflect a sense of patience—he suggests that both the housing market and the economy are likely to settle into a more predictable, if slower, pattern. For now, he sees no signs of imminent recession, which is reassuring news for those bracing for the unexpected. Instead, the outlook for Canada’s economy, interest rates, and housing market is one of cautious optimism and steady adaptation.

In short, if you’re navigating this market as a buyer, seller, or simply a concerned Canadian, Perrault’s insights offer a grounded perspective: stay aware, but don’t expect massive upheavals.

Bank of Canada’s Big Rate Cut: What It Means for Vancouver’s Housing Market

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The Bank of Canada recently announced a significant rate cut of 50 basis points, or half a percent, marking a major shift in the country’s interest rate environment. This “jumbo cut” has lowered borrowing costs substantially, prompting questions about what may lie ahead for the Vancouver real estate market.

While it’s easy to speculate on the future, my approach is to base predictions on past data, providing a more solid foundation than simply guessing. Here’s an overview of what happened the last time the Bank of Canada made a similar rate cut, followed by practical advice on what to consider if you’re thinking about entering the market now.

Historical Insight: The 2009 Rate Cut

The last major cut of this magnitude occurred in March 2009, during the global financial crisis. At that time, Canada’s economy felt the shockwaves of the U.S. housing market crash, with impacts in Vancouver’s housing market as well.

  • February 2009: Before the rate cut, interest rates were set at 1%, and market activity was already on the rise. Total sales in Greater Vancouver stood at 1,480—a 94% increase over January.
  • March 2009: Following the cut to 0.5%, sales jumped to 2,269 units, indicating a quick response to the lowered rates.
  • April–June 2009: Activity continued to surge, with April sales reaching 4,649 and remaining robust into the summer months.

However, the rising sales volume didn’t immediately translate into price increases. It wasn’t until May 2009 to May 2010 that prices began climbing significantly, illustrating a lag between rate cuts and price growth.

What This Means for Today’s Market

While there are clear similarities between 2009 and today, there are also some critical differences. Current interest rates are still much higher than they were in 2009, and we’re entering a seasonally slow period for real estate. Typically, activity tapers off in December and January, so the Bank of Canada’s rate cut may not drive a quick market surge.

Nonetheless, this cut signals the start of a potential trend, with more rate reductions anticipated over the next year. This forecast, supported by various economic reports, suggests that lower interest rates could boost the real estate market as we move into 2025.

Questions to Consider if You’re Thinking About Buying or Selling

If you’re on the fence about entering the market, here are some points to reflect on:

  1. Has the Market Bottomed Out? – Trying to “time” the market is notoriously difficult, but examining past patterns may give you an edge. Do you believe prices have reached their lowest, or do you expect further drops? Consider factors like ongoing rate cuts, immigration rates, and inventory levels.
  2. Is Now the Right Time to Buy? – With rates potentially declining further, purchasing now could lock in favorable financing options, but keep in mind that the market could still shift depending on broader economic conditions.
  3. Are You Prepared for Market Changes? – If you’re a seller, spring 2025 might see a busier market as buyers re-enter due to lower rates, potentially driving prices up. If you can afford to wait, holding off until rates stabilize further may be beneficial.

Key Takeaways for Vancouver’s Market

Lower rates tend to stimulate activity, but the pace of change varies. Sales volume might increase before prices do, as we saw in 2009. This means that if you’re aiming to purchase at a lower price, acting sooner could work in your favor before prices potentially climb. However, if your goal is to sell, waiting for rates to stabilize or drop further could lead to better offers.

For more specific guidance, consider consulting economic forecasts or staying tuned to market updates. And if you’re a first-time home buyer unsure about the process, I’ve prepared a free guide to help you understand the steps to buy in Greater Vancouver.

If you’d like tailored advice, don’t hesitate to reach out. As a Vancouver real estate agent, I’m here to help you make informed decisions in a changing market.

Cautious Buyers Mark the Start of Fall Market – October 2024 Update

Oleg First time buyers, For Buyers, For Sellers, Market update, News, Statistics, Videos 0 Comment

VANCOUVER, BC – October 2, 2024 – Home sales in Metro Vancouver saw a slight year-over-year decline in September, with a 3.8% decrease, indicating that recent reductions in borrowing costs have yet to significantly stimulate demand.

According to Greater Vancouver REALTORS® (GVR), residential sales totaled 1,852 in September 2024, down from 1,926 in September 2023. This figure is also 26% below the 10-year seasonal average of 2,502.

“Many in the real estate sector have been looking for signs that lower mortgage rates are reigniting demand, but the data from September isn’t showing the surge they hoped for,” said Andrew Lis, GVR’s director of economics and data analytics. “Sales continue to trend about 25% below the 10-year seasonal average, which has been the case for several years. While sales are slightly behind our projections, we remain hopeful 2024 will still outperform 2023.”

In September 2024, there were 6,144 new listings for detached, attached, and apartment properties on the Multiple Listing Service® (MLS®) in Metro Vancouver, reflecting a 12.8% increase compared to the 5,446 listings in September 2023 and a 16.7% increase above the 10-year seasonal average.

The total number of homes listed for sale in Metro Vancouver reached 14,932 in September 2024, a 31.2% increase from 11,382 the previous year, and 24.2% above the 10-year average of 12,027.

The sales-to-active listings ratio across all property types in September was 12.8%, broken down as 9.1% for detached homes, 16.9% for attached properties, and 14.6% for apartments. Historical data indicates that when this ratio falls below 12% for a prolonged period, prices face downward pressure, while a sustained ratio above 20% can lead to upward pressure on prices.

“With some buyers hesitant, inventory levels have remained high, offering more choices for those still in the market,” Lis explained. “However, with increased options, prices have stayed relatively stable over the past few months. September has now shown small declines across all segments, primarily because sales haven’t kept up with new listings, pushing the market closer to a buyer’s market. With two more policy rate decisions expected this year, and potential further reductions, demand could pick up if buyers re-enter the market later this fall.”

The MLS® Home Price Index benchmark for all residential properties in Metro Vancouver is currently $1,179,700, representing a 1.8% decrease from September 2023 and a 1.4% decrease from August 2024.

Detached home sales in September 2024 reached 516, a 9.8% decrease from the 572 sales in September 2023. The benchmark price for a detached home stands at $2,022,200, a 0.5% increase from last year but down 1.3% from August 2024.

Apartment sales totaled 940 in September, down 4.9% from 988 the previous year. The benchmark price for an apartment is now $762,000, a 0.8% decrease from both September 2023 and August 2024.

Attached home sales saw a positive trend, reaching 378 in September 2024, a 7.4% increase compared to 352 sales in September 2023. The benchmark price for townhouses stands at $1,099,200, a 0.5% increase from last year.