The Top News to Affect Canadian Real Estate

The Top News to Affect Canadian Real Estate

The Canadian Real Estate market is a place that goes through many ups and downs, changes, and turning points. It’s really hard to keep up with the news when it comes to the Canadian housing market but to sum it up, here is a list of the recent news.

  1. Rising prices of detached homes have led to a downfall in sales

The rising prices of Canadian Real Estate has been going on for a while. Last July the prices were higher by 12% in Calgary. These homes have the highest prices and combined with the rapidly rising rates of Bank of Canada; home-buyers have taken a back seat reading to the downfall in home sales.

The search for apartments for sale and apartments for rent will go up with the rising prices for detached homes. MLS real estate market is also set to boom with new listings because of the changing market prices rapidly.

  1. Home sales in Canada have dropped by 22% since last year

The rising prices of real estate in Canada had a major impact on the buyer’s market which led to the 22% drop in sales. While some parts of Canada are witnessing a higher surge in the market, some parts are witnessing a different market trend with inflating rising.

This is all happening since the Bank of Canada has been increasing their benchmark interest rate and directly affecting the market planning to invest in a property. There are going to be many homes for sale listed in MLS listing that we’ll see for a while.

  1. Half of the Canadian renters planning to stay tenants indefinitely as per the survey

Because of the turbulent raise and fall of Canadian home prices and the disturbed economy, tenants are choosing to stay tenants. This is because 73% think it’s a bad time to buy a house and 17% think they will never buy one while the house for rent market becomes hot.

This drastic perception might be a result of consistently rising prices in the housing market and the insecure future of it. Many home buyers can be seen searching for houses for rent near me soon with this perception and the real estate listings for the same may go up.

  1. Canada’s house prices boomed faster in suburbs than in downtown

As the pandemic took the world by surprise it did not come as a surprise that the demand for suburban homes would rise. Due to the worldwide effect of the pandemic almost every job switched to being remote.

In this process, people also learned that many jobs could have been easily done from home. This realization led to the demand for bigger homes and hence the pricing gap between downtown homes and suburban homes reduced. Real Estate Brokerages are going to be booming with new listings every now and then as this trend is still going strong.

  1. OFSI set to make loan changes to reduce lender risk

It is a well-known fact that the real estate market is proportionally dependent on the banking industry. Mortgage plays a key role in home buying and thus the lender is always at a risk of changes in the loan market.

This is why OFSI has decided to for borrowers who owe more than 65 percent of the loan value, a portion of their payment must go toward the loan principal rather than to interest until they bring the loan below that threshold.

  1. Bank of Canada raised its benchmark interest rate again

The world and specially the North American countries can witness the onset of another roaring inflation again. To reduce the risk of its outcomes Bank of Canada, the central bank has again hiked its interest rates by 50 basis points in order to tame inflation.

This hike has brought the policy interest rate to 1.5 percent. Such aggressive pathways are being taken by the central bank to deal with the skyrocketing inflation. The Canadian economy is very active currently and the demand is in excess predicting a rush for the MLS listings and Real Estate Listings.

  1. Canada bans foreign home buyers for 2 years

The Canadian economy is fuming right now because of the sky-high inflation rate. The real estate market is at an all-time high and low which directly means an unstable market. Without being able to predict the future of the market, whether home buying would soar or renting, Canada has currently banned foreign home buyers to buy a property in Canada for 2 years.

This start decision has been taken by the Canadian government to cool down the market and sort the rising prices in real estate first. Real Estate Brokerages are seeing a dip in the market and more demand for apartments for rent near me searches.

  1. There is a slowdown in sales in cities like Toronto and Vancouver

Real Estate Brokerages and realtors in Canada are witnessing red-hot cities like Toronto and Vancouver to be sitting and gathering steam. The hike in prices, as well as the higher interest rates, have specially slowed down sales in these cities and their surrounding areas leading to a rise in the real estate listings in the suburbs.

Many realtors from Toronto have seen houses that were likely to be sold out in a week in months like February sitting for quite some time in July. Realtors are also witnessing MLS listings that would have had a 100 plus showing earlier this week only getting 5-6 showings in a week.

  1. Bank of Canada to tighten mortgage rules

Due to the risk associated with lending to the currently inflated market, the central bank has decided upon tightening their rules. Mortgage will not be given out so easily anymore in order to make corrections to the real estate market.

Borrowers of both insured and uninsured loans will now have to show that they can afford to pay off the mortgage in order to secure a loan for buying a home in Canada.

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