Inflation hit a 40 year high this week reaching 7.7%, with food and fuel driving the gains. Mortgage rates continue their northern ascent with fixed rates at or above 5%, and variable expected to rise to the realm of 4.5%. Mortgage payments on your typical Canadian home are up $1,000 per month, or 60% in just 9 months. Yet the Bank of Canada is set to raise rates at the July 13th announcement with 90% of Economists predicting a 0.75% increase. This will affect housing deeply with prices and sales already falling fast.
National homes sales are down 25% from last year and HPI prices ticked down for the second month in a row - not seen since 2019.
Meanwhile, job vacancies in Canada surpassed 1,000,000 - and Permanent Residencies were handed out to 64% more people than last year to date.
CMHC stated that 5.8 million homes are needed by 2030 just to start bringing prices down, while the actual is predicted to be closer to 1.5 million - meanwhile the Canadian Government is looking to put 3.6 million new people into the country over the same timeframe.
So while the focus is all on inflation right now, when the cycle turns back up, the housing shortage issue will be there ready and waiting.
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