We had more ghosts and goblins at our door than in past years and that was fun. But the Jack-o-lantern that glowed is now gone having been dissected by fattening squirrels. In contrary style The Bank of Canada offered a Hallowe’en breakdown of our economic diet to come. What sort of slimming regimen are we on?
In Toronto real estate, things are better than you may think. Every day I talk with people who want to buy and sell. This suggests a strong market on the horizon. Buyers are watching the listings. Sellers are fixing up their houses with paint, and light renos. The Governor of the Bank of Canada said statistics may not be the best way to predict this market, but rather surveys and direct feedback from consumers and service providers.
It was buried in the message, but a cautious positivity accompanied the Bank of Canada’s announcement on October 26. Yes, inflation continues at unacceptable rates at 6.9% for September. It’s all the same story of supply and demand challenges – just as it is in the housing market. What are the wild cards? International conflict and the spectre of a circling of the pandemic. Will house prices continue to fall while costs of services and goods increase. Possibly, but house prices will soon be pressed upward again, and supply chain corrections are coming. What pushes house prices up – lack of supply, pent-up local demand, plus immigration stimulated by all the good things Canada has to offer.
While The Bank identified economic positives, it came just short of promising another rate hike before the end of the year. The Governor asked the Press to note the dramatic 1 point raise, followed by .75 for the next and this most recent, .50. Thus, the next anticipated raise is expected at .25. The Bank will likely hold then and watch the CPI for decreasing inflation. The Bank does not want to over-correct the economy. On the sidelines , there is a real estate engine loudly revving up in the economic garage. The big doors are going to open but the timing is uncertain.
If you can find what you want. Ask your mortgage expert if a short-term mortgage is the wise choice now. The Bank of Canada suggest mortgage rates may be reduced toward the end of 2023. I think the wisdom of not trying to time the markets is strong, but I’d say it’s best to be informed about market impact factors at same time. Ultimately, make decisions based on what is best for you and your family.
Your home is not only your Halloween front step. It’s usually the foundation of your family life.