Latest Blog Posts

June 7, 2023: Bank of Canada Raises Policy Rate by 25 Basis Points, Maintains Quantitative Tightening

bank of canada interest rate

Bank Of Canada Raises Interest Rate For First Time Since January, Now 4.75%

Source: Bank of Canada

In a recent announcement, the Bank of Canada has decided to increase its target for the overnight rate by 25 basis points, bringing it to 4¾%. The Bank Rate now stands at 5%, while the deposit rate is at 4¾%. Additionally, the Bank will continue its policy of quantitative tightening.

On a global scale, consumer price inflation is gradually decreasing due to lower energy prices compared to the previous year. However, underlying inflation remains stubbornly high. Major central banks worldwide are signaling the need for further interest rate hikes to restore price stability as economic growth softens in response to higher interest rates. The United States is experiencing a slowdown in its economy, although consumer spending remains unexpectedly resilient, and the labor market remains tight. Economic growth in Europe has essentially stalled, but core prices continue to rise. China’s growth is expected to decelerate after a surge in the first quarter. Financial conditions have tightened to levels similar to those observed before the bank failures in the United States and Switzerland.

The Canadian economy outperformed expectations in the first quarter of 2023, with a GDP growth rate of 3.1%. Consumption growth was surprisingly strong and well-diversified, even when accounting for population gains. The demand for services continued to rebound, and there was an increase in spending on interest-sensitive goods. Moreover, the housing market has shown recent signs of activity. While the labor market remains tight, the influx of new workers due to higher immigration and participation rates has been swiftly absorbed, indicating ongoing robust demand for labor. Overall, there is a more persistent excess demand in the economy than previously anticipated.

bank of canada rate
Bank of Canada Raises Policy Rate. Picture source: Canva

Consumer price index (CPI) inflation rose to 4.4% in April, marking the first increase in 10 months. Prices for various goods and services exceeded expectations. Despite lower energy costs, goods price inflation increased, while services price inflation remained high due to strong demand and a tight labor market. The Bank anticipates that CPI inflation will ease to around 3% in the summer as lower energy prices take effect and the significant price gains from the previous year no longer factor into the yearly data. However, concerns have risen regarding the potential for CPI inflation to remain significantly above the 2% target, as three-month measures of core inflation have consistently ranged from 3½% to 4% for several months, coupled with the persistence of excess demand.

bank of canada interest rate
Bank of Canada Raises Policy Rate. Picture source: Canva

Based on the accumulated evidence, the Governing Council has made the decision to raise the policy interest rate. This action reflects their belief that the existing monetary policy was not sufficiently restrictive to restore supply and demand equilibrium and achieve sustainable inflation in line with the 2% target. The Bank’s quantitative tightening policy is working in conjunction with the restrictive monetary stance to normalize its balance sheet. The Governing Council will continue to assess the dynamics of core inflation and the outlook for CPI inflation, paying particular attention to factors such as excess demand, inflation expectations, wage growth, and corporate pricing behavior. Their goal remains steadfast in restoring price stability for the benefit of Canadians.

To read more local news and updates please check our BLOG PAGE

To view Geoff Jarman’s Listings CLICK HERE


Tags: real estate Vancouver, Vancouver real estate. Vancouver realestate, home sales, Vancouver homes sale, house prices, housing prices, house buying, real estate Vancouver market, Vancouver market, real estate agent Vancouver, Burnaby realtor, Geoff Jarman, Geoff Jarman top Burnaby realtor,  2023 market news, Vancouver Multifamily Market, BC, housing market, bank interest rates, central bank, Bank of Canada, Bank of Canada Raises Policy Rate

MAY 2023 METRO VANCOUVER HOUSING MARKET HIGHLIGHTS

May 2023 market stats

May 2023 Market Update: Competition Heats up Among Buyers as Summer Arrives

Source: REBGV

may 2023 marekt stats
Source: REBGV

While the year started slower than usual, Metro Vancouver’s1 housing market is showing signs of heating up as summer arrives, with prices increasing for the sixth consecutive month.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 3,4112 in May 2023, which is a 15.7 per cent increase from the 2,947 sales recorded in May 2022, and a 1.4 per cent decline from the 10-year seasonal average (3,458).

“Back in January, few people would have predicted prices to be up as much as they are – ourselves included. Our forecast projected prices to be up modestly in 2023 by about two per cent at year-end. Instead, Metro Vancouver home prices are already up about six per cent or more across all home types at the midway point of the year.”

Andrew Lis, REBGV director of economics and data analytics

There were 5,661 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in May 2023. This represents an 11.5 per cent decrease compared to the 6,397 homes listed in May 2022, and was 4.3 per cent below the 10-year seasonal average (5,917).

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,293, a 10.5 per cent decrease compared to May 2022 (10,382), and 20.6 per cent below the 10-year seasonal average (11,705).

Across all detached, attached and apartment property types, the sales-to-active listings ratio for May 2023 is 38.4 per cent. By property type, the ratio is 28.5 per cent for detached homes, 45 per cent for townhomes, and 45.5 per cent for apartments.

May 2023 Market Update
Source: REBGV

Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“You don’t have to squint to see the reason prices continue to increase. The fundamental issue remains that there are more buyers relative to the number of willing sellers in the market. This is keeping the amount of resale homes available in short supply,” Lis said.

“And in a surprising twist, MLS® sales in May snapped back closer to historical averages than we’ve seen in the recent past, despite mortgage rates being where they are now, and new listing activity having been slower than usual this spring. If mortgage rates weren’t holding back market activity so much right now, I think our market would look a lot like the heydays of 2021/22, or even 2016/17.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,188,000. This represents a 5.5 per cent decrease over May 2022 and a 1.3 per cent increase compared to April 2023.

Sales of detached homes in May 2023 reached 1,043, a 30.7 per cent increase from the 798 detached sales recorded in May 2022. The benchmark price for a detached home is $1,953,600. This represents a 6.7 per cent decrease from May 2022 and a 1.8 per cent increase compared to April 2023.

Sales of apartment homes reached 1,730 in May 2023, a 7.9 per cent increase compared to the 1,604 sales in May 2022. The benchmark price of an apartment home is $760,800. This represents a two per cent decrease from May 2022 and a 1.1 per cent increase compared to April 2023.

Attached home sales in May 2023 totalled 608, a 16.7 per cent increase compared to the 521 sales in May 2022. The benchmark price of an attached home is $1,083,0003. This represents a 4.7 per cent decrease from May 2022 and a 0.2 per cent increase compared to April 2023.

1   Areas covered by the Real Estate Board of Greater Vancouver include: Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.

2   REBGV is now including multifamily and land sales and listings in this monthly report. Previously, we only included detached, attached, and apartment sales, and these additional categories, which typically account for roughly one to two per cent of total MLS® activity per month, are being included for completeness in our reporting.

3  The national MLS® Home Price Index (MLS® HPI) operations group underwent an annual review of the model in May in-line with statistical best practices. The attributes and neighbourhoods within the model were updated based on sales data to more accurately reflect current market conditions. To ensure the MLS® HPI coverage is consistent and comparable, historical aggregate and composite data has been recalculated.


CLICK HERE – Full REBGV May 2023 Market Update

Vancouver BC – June 3, 2023

Have a look at the REBGV May 2023 Market Update Insights!
  • DOWNLOAD the REBGV May 2023 Market Update CLICK HERE
  • See the Monthly Market Stats CLICK HERE
  • For more market information from the Real Estate Board of Greater Vancouver CLICK HERE
  • To view Geoff Jarman’s Listings CLICK HERE

Tags: real estate Vancouver, Vancouver real estate, Vancouver realestate, home sales, Vancouver homes sale, house prices, housing prices, house buying, real estate vancouver market, Vancouver market, real estate agent Vancouver, Burnaby realtor, Geoff Jarman, Geoff Jarman top Burnaby realtor,  2023 market news, Vancouver Multifamily Market, May 2023 market news, housing market