The November homebuyer survey saw a shift in areas buyers were from for the first time in over 6 months 57% of the buyers were within the Association where every other month has been around 51-50 % as we saw a potential shift as the weather hit different areas of BC and the roads being washed out, Something we will watch with the December survey to see who is buying and who to target with our marketing.
2022 Interest Rate Forecast
As we continue to have rock bottom interest rates, one of the major factors that can affect the real estate market is an interest rate increase. This is something I have been watching but every meeting by the Bank of Canada in the last 18 months they have continued to keep rates low with Quantitative Easing (The quantitively easing program that the Government of Canada used really comes down
1. Central Bank creating money electronically and 2. Using electronic money to purchase bonds.)
As the Bank of Canada targets a 2-3% inflation rate and with current inflation at 4.7% in November, there is really no indication that they will increase interest rates soon, however, this week I am going to rely on a professional and look at their interest rate forecast for 2022. BCREA's Chief Economist Brendon Ogmundson released this market forecast 2 weeks ago. In the report Brendon indicated "Indeed, a more hawkish-sounding Bank of Canada ended its Quantitative Easing program and signaled that its first rate increase may now occur in the middle of 2022, or about three-to-six months earlier than previously expected." A lot of these predictions are all based on the Bank of Canada's policy changes and language which Brendon mentioned: " prompted a dramatic market reassessment". In the report, they have provided a prediction for all of next year with regards to interest rates with a 0.25% increase in the prime rate between Quarter 2 and Quarter 3 and another one between Quarter 3 and Quarter 4. For a total rate hike of 0.5% next year.
