These days there’s a lot of debate over the beneficial nature of lower interest rates from the BOC facilitating higher numbers of home sales as a means of helping the country’s GDP weather the COVID storm. Few people if any would disagree that having real estate be such a key part of Canada’s GCP is NOT a good thing, but it is what it is and here in 2021 that’s as true as ever. Land transfer taxes are only part of that equation too, but that is something that a real estate expert will be able to tell you much more readily than the person who’s in a better position to take on a mortgage because of those BOC rates.
Along with all of it is talk that market stress indicators are indicating a housing bubble that is eventually going to burst, and while that may well be true what we can say here at ground level in the real estate business is that none of that is discouraging enormous numbers of people from either entering the real estate market or moving up in it. People are buying homes – lots of them – and paying more for them than ever before.
Now of course as a real estate agent that is going to be music to your ears, and no one will need to explain why. But that brings a whole lot of competitors into the ring than would be the case otherwise, and in particular realtors who are new to the game can find it’s a tougher go than they expected. It’s for these individuals that our online real estate lead generations system is recommended most. It puts you more directly in touch with folks who’ve indicated they’re not just contemplating a real estate purchase or sale – they’re ready to move forward with it.
So in keeping with what we’re saying here it seems like there are not shortage of such people, global Pandemic and depressed economy or not.
1.9% Average Rise Nationally for Feb. ‘21
The BOC is keeping its lending rate unchanged at 0.25%, and as mentioned this is all for very strategic reasons and not because of any benevolence towards would-be homeowners on their part. Along with that is newly-built Canadian homes seeing faster price rises than at any other time in more than three decades. The stimulus is both direct and indirect, as developers are going to be keener to invest in new home developments when they know that plenty of buyers are going to be lining up to buy them.
Prices rose 1.9% in February from the previous month, according to data released Thursday by Statistics Canada. You have to go back a full 32 years to find the last time the fastest one-month increase of this type occurred. That’s right, 1989.
So regarding that 0.25% rate holding steady for BOC lending, their position on that is that it will keep rates on hold until its inflation objective is sustainably achieved. The consensus among finance and economy experts is that these rates aren’t going anywhere until 2023 at the earliest.
Many of these same individuals are saying as well that Canada is in one of the biggest housing bubbles of all time, and while there may be some truth to that it’s a topic for another discussion.
Red-Hot Market Paces
Anytime you can pair record-low interest rates, extremely limited inventory, and unparalleled demand for more space and better accommodations then sales activity is going to be more robust, and prices are going to go up big time as it becomes much more competitive to buy a home that suits you in the same way it suits plenty of other would-be homebuyers too.
All of which works out to this continued strength in new housing prices being increasingly an obstacle for some potential buyers hoping to purchase a home throughout the rest of 2021 and beyond. As prices increase, the purchase of a house will become less affordable as bidding wars continue to overheat an already active market.
Vancouver’s new-home prices have seen the largest gains over this time, rising 4% and just ahead of similar increases seen in 22 of 27 cities in the country. Other cities include Toronto, Victoria, Kitchener-Cambridge-Waterloo, Calgary, Hamilton, Oshawa, Saskatoon, Edmonton, Ottawa, Montreal, London, Kinston, St. Catharines, Regina, Halifax. St. John’s NL, Winnipeg, and Quebec City.
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Sign up for Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that are delivered to you exclusively. Once you’ve registered and submitted your request for leads based in the city or town where you’re working as a real estate agent then you’ll start receiving leads that will not be provided to any other realtor but you. What that means is you will have the ability to be in touch with these prospective clients first. Impress them and make them believe you’re exactly the professional they need to help them navigate the real estate market and you’re going to be that much more on your way to establishing your real estate business and making a name for yourself.
