The Bank of Canada announced Sept 4th that it is maintaining its target for the overnight rate at 1 per cent.
In its accompanying statement, the Bank highlighted that an uncertain global economy is delaying an expected rotation of growth in Canada toward exports and investment. This means that the burden of economic growth will remain on households at a time when most households are deleveraging and looking to slow consumption.
All of this adds up to a Canadian economy that will grow below trend in 2013, likely at a rate of around 1.5 per cent. Below trend growth will translate to continued subdued inflation. Rising long-term interest rates, along with soft economic growth through the first half of 2013, have taken some urgency out of future monetary policy tightening. The Bank anticipates a gradual normalization of policy interest rates as conditions for inflation, growth and household debt normalize. (BCREA Economics Now)
In addition, accelerating economic growth in the US is making the loonie cheaper. This should help boost sales of Canadian products abroad and, in turn, help exports propel Canada’s growth as the input from household consumption weakens.
Real Estate specifically, buyers and sellers are becoming more confident. An important measure of the balance between housing supply and demand is the number of months it would take to sell our existing inventory. We’re currently sitting at eight months’ supply in the Fraser Valley indicating a balanced market, which is also being reflected in the stability of home prices. Home prices generally remain unchanged or down slightly from a year ago.
In August, the benchmark price of single family detached home in the Fraser Valley was $551,000, virtually on par with $551,400 during the same month last year. For townhouses, the benchmark price was $298,200, a decrease of 1.6 per cent compared to $303,000 in August 2012 and the benchmark price of apartments was $203,900, 1.3 per cent less than in August 2012 when it was $206,600.
That being said, considering your property type and community in relation to supply and demand is crucial when considering a pricing for a buy or sell.
In general, we are looking forward to an uptick in fall market activity in the final quarter of this year as summer conditions were slow across property types. The Fraser Valley Real Estate Board processed 1,258 sales in August, an increase of 17 per cent compared to the 1,073 sales in August of last year however, the volume remains 13 per cent below the 10‐year average for the month.
If you have any questions about how your home may fair in today’s market give us a call or email anytime. We would love to provide you with the information needed to ensure your best interests are looked after now and in the future.