BCREA: Canadian Housing Starts September 2022

Canadian Housing Starts (September 2022) – October 18, 2022
Canadian housing starts rose by 29.2k (10.8 per cent) to 299.6k units in September at a seasonally-adjusted annual rate (SAAR). Comparing year-over-year, starts were up from September of 2021 (19.3 per cent). Single-detached housing starts fell 1 per cent to 76.5k, while multi-family and others rose 16 per cent to 223.1k (SAAR).

In British Columbia, starts increased by 10.9 per cent in September, rising to 54.3k units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts rose 18 per cent m/m to 8k units while multi-family starts rose 10 per cent to 42.1k units. Starts in the province were 50 per cent above the levels from September 2021. Starts were up by 8.8k in Vancouver and 1.3k in Abbotsford, but were down by 4.5k in Kelowna and 1.2k in Victoria. The 6-month moving average trend rose 7.7 per cent to 50.5k in BC in September.

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BCREA: Mortgage Rate Forecast June 2022

BCREA has released it’s latest mortgage rate forecast. To summarize their report:

  • In the last report BCREA forecasted that the 5 year fixed mortgage rates would reach 4% later in 2022. Instead they are at 4.69% to battle inflation.
  • Bond markets expect very aggressive Bank of Canada.
  • Expecting the 5 year fixed mortgage rate to reach 5% which is the first time since 2009.
  • Current Buyers currently qualified at a rate of 6.49% with it likely going up to a 7% qualification soon. This has not been seen in the Canadian market since the early 2000’s.
  • Bank of Canada’s main focus is to lower inflation at this time.

Economic Outlook

  • Growth in the first quarter of 2022 was 3.1%.
  • Likely will see a slow down in growth due to inflation.
  • Growing concern that 2023 will see a recession but indicators suggest the economy is not currently in a recession.

Bank of Canada Outlook

  • The ultimate end for interest rate increases will depend on the trajectory of inflation over the next few months.
  • Some see signs of inflation peaking while consumer and commodity prices continue to rise.

Full Report is included below or download the PDF here.

Click here to visit to BCREA’s website. To view other statistics for the Kamloops and BC real estate market click here.

If you want to be kept informed on Kamloops Real Estate, News and more visit our Facebook Page.

To search for Kamloops real estate and homes for sale click here.

BCREA Mortgage Rate Outlook

BCREA released it’s latest mortgage rate outlook. Read below and link to full report is included below.

The average Canadian 5-year fixed rate has fallen to under 2 per cent, the result of a rapid and overwhelming policy response from the Bank of Canada to the COVID-19 pandemic. The Bank swiftly brought its overnight rate to its effective lower bound of 25 basis points and used the impressive scope of its balance sheet to counteract a nascent rise in credit spreads. Those measures, and those of its global counterparts, helped to forestall a potential repeat of the credit crisis that shocked the global economy over a decade ago.

The Bank’s foray into quantitative easing (QE), or the purchasing of bonds across the yield curve of short-to-long term maturities, and an injection of liquidity into the mortgage market have resulted in record-low Canadian mortgage rates. The average 5-year fixed rate now sits below 2 per cent and is just 165 basis points over the 5-year government bond yield, essentially in line with the long-term average.

While the average 5-year rate has come down considerably, the qualifying rate remains stubbornly high at 4.79 per cent. That rate has become notoriously divorced from its underlying benchmark in recent years and now sits at a spread of close to 450 basis points over the 5-year bond yield, or about 100 basis points higher.

With the Bank of Canada eschewing negative interest rates and providing forward guidance that it has
no plans to raise its policy rate until slack in the economy is absorbed, there is not much on the
horizon that may move mortgage rates one way or the other. We expect a mild rise in rates as the Bank
slows and eventually ends its QE, perhaps by the end of 2021. Studies show QE lowers long-term interest rates by 10-25 basis points, so we can anticipate a similar magnitude rise in 5-year rates when QE ends.

Click here to continue reading.

Click here to visit to BCREA’s website. To view other statistics for the Kamloops and BC real estate market click here.

If you want to be kept informed on Kamloops Real Estate, News and more visit our Facebook Page.

To search for Kamloops real estate and homes for sale click here.

BCREA Mortgage Rate Forecast for March 2020

BCREA just released it’s Mortgage Rate Forecast for March and the year of 2020. With the COVID-19 mortgage rates have dropped. The Bank of Canada recently cut the rate again however says it is at a point where it can’t go lower. It is looking like a Canadian recession is unavoidable however it all depends on how long the pandemic related regulations go on for. This is a large factor that prevents accurate predictions since we have not seen an event of this magnitude in decades.

The Canadian government has postponed changes to the mortgage stress test due to the current events. This will help those renewing or refinancing their mortgages which will free up monthly cash flow due to the lower payments.

Economic growth in Canada was slowed at the end of 2019 due to the rail blockades and now COVID-19. The economy is also dealing with plummeting oil prices, a sharp decline in retail sales, tourism and other consumer related businesses.

It is expected that if we have a strong recovery in the second half of 2020 the Bank of Canada will likely maintain it’s policy rate at 0.25% for the rest of the year.

BCREA Mortgage Rate forecast March 2020 Real Estate BC COVID-19 Coronavirus
BCREA Mortgage Rate forecast March 2020 Real Estate BC COVID-19 Coronavirus

Click here to download the full PDF version of this report.

Click here to visit to BCREA’s website. To view other statistics for the Kamloops and BC real estate market click here.

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