Home prices are still high
Despite an aggressive monetary tightening policy by the Bank of Canada, home prices remain elevated in many parts of the country.
Around the lower mainland for example, prices are still up year over year.
There are a few reasons for this stubborn price behaviour.
- Those higher interest rates have not been felt in the mortgage market yet. It usually takes 12 to 18 months for monetary policy to take affect. This year and even into early 2024 should be the time when prices really come down.
- There’s not enough inventory on the market. Home owners don’t want to sell and listings have dried up.
- Increasing demand continues to keep prices elevated. Canada just saw a 1 million population growth, the fastest since recent history. On average the country builds about 200,000 housing units per year. That’s not enough given the amount of immigration we’re seeing.
A couple of weeks ago I made this video that goes deeper into these reasons and give a timeline for potentially the bottom of the housing market.
Random Useless Fact:
Samsung has the brightest smartphone screen at 2,000 nits of brightness.