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2023 Residential Market Forecast Vancouver Real Estate Board

Home sales in 2023 will remain in line with last year while prices may see small increases, according to the Real Estate Board of Greater Vancouver’s first 2023 Residential Market Forecast.


The forecast looks at current and historical market trends alongside economic factors like inflation and risk of recession to predict what 2023’s housing market will look like.


A second forecast will be coming in the second half of the year.

 
 

Key highlights

  • The Bank of Canada is at, or very near, the peak of the current interest rate tightening cycle.
     
  • Apartment sales are forecast to decrease over last year, while detached homes are forecast to increase.
     
  • While increasing mortgage costs are decreasing purchasing power, other factors will continue to put upward pressure on prices.
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Bank of Canada Interest Rate Announcement - January 25, 2023

Bank of Canada Interest Rate Announcement -
January 25, 2023

The Bank of Canada raised its overnight policy rate by 25 basis points to 4.5 per cent this morning. In the statement accompanying the decision, the Bank noted that recent economic growth in Canada as been stronger than expected and labour markets remain tight but it sees growing evidence that monetary policy is working to slow the economy. The Bank expects the economy to stall through the middle of 2023 before picking up later in the year.  The Bank sees improvement in the inflation outlook with signs that core inflation has peaked and it projects a significant decline in inflation this year. It expects inflation to return to its 2 per cent target by 2024.

Most importantly, the Bank stated that it expects to hold its policy rate at 4.5 per cent as it monitors the impact of the last year of rate increases. While the door remains open to further rate increases should the outlook for inflation change, the Bank for now is on hold.  From here, the trajectory of mortgage rates will depend on the outlook for the economy. With growth expected to slow in 2023, markets are pricing in Bank of Canada rate cuts by the end of this year and average five-year fixed mortgage rates have declined in January from their peak of 5.5 per cent to 5.19 per cent and will likely fall further in coming months. However, the average variable rate mortgage, now at 6.35 per cent will stay elevated until the Bank of Canada begins lowering its policy rate.


Link:  https://mailchi.mp/bcrea/bank-of-canada-interest-rate-announcement-24s8ethx68
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The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.