EXECUTIVE SUMMARY
In British Columbia, the real estate market has experienced a stable but cautious market, with modest declines in sales volume year-over-year. The introduction of more favourable interest rates could encourage greater activity, but the market remains balanced by significant supply of new listings and land development opportunities. Prices have seen little movement, reinforcing the trend towards a more buyer-friendly environment. Despite these conditions, developers and investors are poised to see opportunities as demand for housing, particularly around transit-oriented areas, remains steady with many developers on the sidelines waiting for the right time to strike
–ISAAC FOORD, Personal Real Estate Corporation & Associate Vice President
INTEREST RATE
Finally in June of 2024, The bank kicked off its long-awaited monetary policy easing cycle cutting its benchmark interest rate for the first time in four years – followed by two more quarter-percentage-point rate cuts for Q3 in July and September landing currently at 4.25 per cent.
INFLATION
Canada’s inflation rate fell to 1.6 per cent in September, Statistics Canada reported on Tuesday October 15, after hitting the Bank of Canada’s 2 per cent goal in August. While prices remain elevated, especially for rent and groceries, lower gasoline prices (which fell by 10.7% on a yearly basis) helped drive down inflation.
BOND MARKET
The Federal Reserve’s long-awaited reduction in interest rates played a key role in the solid returns on stocks and bonds; This additional clarity helped push bond markets further into positive territory during the quarter.
GDP
“The 0.2% increase in GDP in July was stronger than the “essentially unchanged” advance estimate a Month ago, but still leaves growth in Q3 tracking below the BoC’s 2.8% forecast in July, and down on a per-capita basis for a sixth consecutive quarter.”
The Real Estate Market
CMHC reports that higher interest rates decreased housing starts by about 30,000 units (roughly 10 to 15 per cent) in Canada in 2023. The state of housing supply is summarized in their recent Housing Supply Report. It found that higher interest rates affected new construction of condo buildings across most of the country (apart from Alberta).
