Dear Clients, Neighbours and Friends,

Not gonna lie, we have been champing at the bit for the results of the Bank of Canada’s (BOC) most recent meeting as so much of the 2024 real estate market is dependent on when the BOC decides to lower interest rates.

The results are in.  The BOC maintained its overnight rate at 5 per cent this morning. In the statement accompanying the decision, the Bank noted that while the Canadian economy appears to have entered into a phase of excess supply, it expects growth in the Canadian economy to pick up this year and next. On inflation, the Bank cited that inflation is still too high and risks remain, and that shelter inflation is still very elevated.

Pent up demand, a bump up in supply and stabilized interest rates created a small uptick in activity in March however this has not been sustained.  Despite more options for buyers it appears most are choosing to wait on the sidelines until the financial landscape improves, namely, interest rates begin to drop.

As of March end, benchmark home prices in South Surrey, White Rock and the Sullivan Panorama areas of Surrey (across property types) have seen a small increase from February, approximately 2-3 per cent, up 6-8 per cent when compared to the same time last year.

There is now a widely held belief in financial markets that today’s rate hold by the BOC will be its last before embarking on a series of rate cuts starting in June. There is also mounting evidence that this is the correct course of action. Jobs data from March showed that the Canadian unemployment rate reached its highest level in three years and inflation is well below target once housing costs are removed.

Given that housing costs are rising as a function of the BOC’s tight monetary policy and its effects on mortgage rates and new home supply, it would be wise for the Bank to look past rising shelter inflation when setting the future course of monetary policy.

The British Columbia Real Estate Association expects that the Bank will lower rates 3 to 4 times this year in 25 bps increments with 2.5 per cent as the ultimate destination for the overnight rate by the end of 2025.

In summary,

Now is a great time to buy!  Rate drops are slow but market changes are fast. Waiting for rates to drop before buying is likely going to cost you more as demand will drive pricing up;  even though rates will be lower, you’ll borrow more and pay more.

It’s also a great time to sell!  Depending on your goals limited supply + serious buyers only = super strong sale prices but determining how to price your home will require a nuanced and experienced approach.

We can help.  We work with you to craft a pricing plan in line with your goals and these rapidly shifting conditions.

Book your free home evaluation now. 

Jenn and Colin