Interest Rates Disrupt
It is happening.
In the last week of April a 5 year interest rate could be secured at 4.09%. Now on the 3rd of May…4.19% While demand remains high interest rates reduce buying power by approximately $50,000 per 1% change in rates.
Sellers are encouraged to list for approximately the price at which they’d sell their properties. Offer dates are still in order but the number of offers will be less than in the height of pandemic buying of 2020 to 2021.
Are we expecting a property value decline. Yes. But it won’t be the same across all markets. In Toronto a worst case scenario showed prices dropping by 7%. In other locations prediction are as dramatic -24%.
However, demand remains high. Mortgage brokers continue to work into the night approving applicants. Immigration is expected to be approximately 450,000 this year with many of these people arriving in Toronto. These new immigrants are largely educated and many have substantial financial resources- they will be buying houses.
Demand is only increasing. A decline will be short-lived.