How do you find your way around? And what is the right decision to make?
On March 2, the Bank of Canada raised its key interest rate for the first time since it significantly lowered it at the start of the COVID-19 pandemic to combat the economic downturn. Raising it to 0.50%, this quarter-percentage point increase in the financing rate is at its highest level since March 16, 2020. This is a significant sign of the changes to come in the relatively near future.
This first increase in the key rate does not augur well for Quebec real estate industry. In fact, other raises are already planned for this year. Any increase in the rate will always have the effect of reducing the ability to buy a home and will implicitly lead to a drop in the number of transactions.
The recent outbreak of war in Ukraine is among other things compounding the existing inflationary pressures, causing oil prices to rise and bringing new inflationary highs. While the Bank of Canada cannot specifically combat conflict-related inflation, it can address the internal price increases such as those in the housing market.
Lastly, there has been a significant loss of momentum from buyers. The total number of sales has decreased by 10% in February 2022 for the Island of Montreal in comparison to February 2021. The number of properties for sale continues to fall, registering a 12% drop in properties for sale compared to the same period last year. However, with this weakness in the market’s supply, sellers are still in a position to benefit from market conditions.
If you’re thinking of selling in the next few months or year, it may be a good idea to move forward with your project to take advantage of the current market and its best selling conditions, before the wind turns.
If you would like to know more, do not hesitate to contact us.
At REALTA, Real Estate is a matter of values.