As house prices and sales cool down in Metro Vancouver, analysts are left to wonder. Will the usual slow lull of summer along with market fatigue cause a rise in interest rates? It is good news for prices to be falling from the pandemic fueled highs we have been seeing. With housing prices peaking in June and then sliding in July this can be good news for some of the market. The questions on everyone’s mind right now are; how low will this dip go and how long will this lull last?
Is There a Term for This?
Romana King who looks at market trends says we can consider this to be a seasonal correction. During this time the market is usually closed as many people are going on vacation and spending time with their children. People are traveling and so the real estate market is slowing down. So this is not an abnormal trend, nor is it unique to the pandemic situation.
With the fact that there are still many restrictions around the world, we haven’t normalized yet. Once immigration restarts we will see an increase in demand. But with higher mortgage rates this may also cause a decrease in the demand soon afterwards.
Bloomberg Mid-June Economic Rankings
Canada was ranked as one of the world’s top markets in mid June along with countries such as Sweden and New Zealand. The main factors affecting price according to the report were;
What We’ve Been Dealing With So Far
- Limited inventory
- Low interest rates
- Buyers tapping into their savings
- Everyone’s expectations for a strong recovery of the economy.
We have seen Vancouver detached home listings falling to their lowest in 20 years. We are looking for a rebound in listings after the summer. But we are also seeing a trend of homeowners hoarding their properties in an aim to refinance them. They do this, so they can make down payments on other properties on the market.
We can assume the average sales prices will fall next year by an average of 13% but that by 2023 interest rates could increase due to immigration and fear of missing out.
What Can You Do?
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