Is the Market Getting Back to Normal?
The Bank of Canada is getting serious about reining in runaway inflation.
In a recent RBC report, Economists are betting that the recent 0.5% rate increase, coupled with the promise of further hikes in the months to come, will be enough to slow down a housing market that has been on a historic tear for the past 24 months.
In recent weeks, we have seen a slight decline in home prices throughout parts of the GTA as buyers are feeling less urgency while also worrying about rising interest rates. Houses that two months ago might have been getting 10 offers are getting one or two right now as home price growth starts to return to normalcy.
It’ll be interesting to see how the overall market responds to higher interest rates in the summer and then into the fall.
RBC believes home prices will reach their peak this spring. They are also expecting a steady drop beyond this year and are now projecting a 2.2% decline in the annual average price in 2023 — a noticeable change from their previously forecasted 0.8% increase.
Looking ahead, even though climbing interest rates will drive more and more buyers out of the market, it will continue to be a strong seller’s market for the foreseeable future due to an overall shortage of listings.
We can’t stress enough though, if you’ve been thinking about listing your home — the sooner you’re on the market the better.
You may also enjoy reading: Avoid These Home Improvements if Thinking of Selling