SilverBeam Homes Blog

What’s Going on in the British Columbia Housing Market?

by Bevony on 10 January 2023 Comments Off on What’s Going on in the British Columbia Housing Market?
Expect Increases!

Metro Vancouver continues to be one of Canada’s most expensive housing markets. It is rivaled only by Toronto. While a decrease in prices is expected, the decrease forecast is a small one of around 1%. 

Why Are BC Home Prices So High?

The story behind the home prices in British Columbia is a story of supply and demand. There are currently more potential buyers than there are sellers, and this has caused a bidding war that causes prices to spiral. Many homes are selling for more than asking doesn’t do well for the real estate market, this only causes higher prices to surface throughout the market. 

Where Is The Hottest Real Estate Market In BC?

Vancouver is still the preferred market for British Columbians seeking to purchase real estate. It is also the highest priced, so it is hot in more ways than one. Persons looking for value are looking toward Victoria and Kelowna. 

Will Mortgage Rates Go Down In 2023 Canada?

As of January 1, 2023, the market consensus is for the Central Bank to increase mortgage rates by 0.25% to 4.5% in the early part of the year. This can go even higher if inflation does not drop below 4.5%. 

When the Central Bank meets on the 25th of January, we are expecting to see a prime rate increase. There is also the speculation of an additional increase of 0.25% in March of 2023. But it is still very early for this forecast. 

The Government of Canada Bond Yield is the main tool used to read the current mortgage rate. The Canadian bond is a debt security that pays investor returns. The percentage return is called the yield and is a very safe investment, because the only way investors won’t get paid is if the Government goes bankrupt. 

The Bond Yield factors in all the economic data on a day to day and even a minute to minute basis. When bond traders think the Central Bank of Canada is going to increase rates, then the Bond Yield is increased. Likewise, when the Bond market thinks the rates will decrease from the Central Bank, then the yield drops. So Bond yield trades in anticipation of where the rates will move from the Central Bank of Canada. And the Central Bank makes all its decisions based on the current economic status. 

For right now, the Yield seems to be priced for an anticipation of a 0.25% increase in rates from the Central Bank of Canada. So mortgage rates aren’t going down anytime soon – not to be the bearer of bad news. But that is the current state of the British Columbia Housing Market. 

BevonyWhat’s Going on in the British Columbia Housing Market?