Inflation continues to be a pesky foe that won’t go quietly into the night. This week we take a look at the North American market and how the inflation story has moved away from its transitory narrative as local demand within the economy has yet to cool off to a point that no longer concerns central banks. The war in Europe continues to put price pressure on a volatile energy market while simultaneously the manufacturing and shipping industry from China continues to come back online it’s becoming more and more clear that North American Central Banks left policy rates too low for too long as inflation proves to be sticker than initially thought.
With that being said both Sellers and Buyers in the Real Estate Market no longer the prices that either of them have to face and Sellers are pulling their listings from the market as they can no longer achieve the sales prices from earlier in the year. Buyers remain largely on the sidelines as well as both sides wait each other out to see how the story unfolds over the next 8 to 16 months. With inflation hanging around, it’s almost certain at this point that fixed rates will be in the 6% range and variable rates could increase by 50-75 basis points on October 26th.
The good news is that Canada continues to smash its immigration numbers achieving 700,000 new permanent residents year over year and 280,000 in the last quarter alone. BC was the beneficiary of 120,000 new permanent residents in the last year at the end of this last quarter.
Without a doubt housing continues to look strong in the long run, but expect more pressure in the rental markets as Buyers look to safer havens until interest rates begin to flatten out.
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Dan Wurtele, PREC, REIA
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Ryan Dash PREC
778.898.0089
ryan@thevancouverlife.com
