Interest rates; certainly a big topic of conversation as we saw policy changes throughout the country in 2018. Ever since the benchmark interest rate was increased by the Bank Of Canada, economists, policy-makers, bankers, and realtors have been warning Canadians to expect more increases as we progressed through the year. It was forecasted that there would be as many as three more hikes by the end of 2019.
But with current market conditions, prices of oil plummeting, and talk of a recession in the states, the outlook has quickly changed. At present, there is not a single hike priced for 2019. In fact, the bank has downgraded its expectations for the Canadian economy this year. Stephen Brown at Capital Economics predicts the slump in the worlds price of oil could be enough to take the wind out of Canada’s economic sails, slowing GDP growth to just 1.5 per cent this year. This is well below the two per cent growth the Bank of Canada was forecasting as of October when it nudged its rate up to where it is now at 1.75%. If the oil and housing markets continue to drag growth, increased interest rates are very unlikely, and the odds of rate cuts will rise in the coming quarters.
The market in the Greater Vancouver area is nothing short of a roller coaster ride. As an industry professional, we have to stay on top of micro and macroeconomics to ensure we are providing our clients with the best advise possible. Be sure to follow along via our blog and subscribe to our monthly market analysis reports to ensure that you stay on top of the current market trends.
With pricing adjusting across most segments in the greater Vancouver area, housing is becoming more affordable. Although buyer stress tests decrease purchasing power, it is important to link up with an experienced and knowledgeable mortgage advisor and realtor to help you navigate this complex market. Make sure that you shop the rates and do your research!
It is now more important than ever to ensure that you have an effective sales strategy in place to ensure your property is well advertised to receive top dollar. An effective online presence that makes your property stand out amongst the competition is imperative as we head into these difficult financial times. We are now technically in a buyers market, so being a savvy seller and having someone to educate you on current market trends is critical.