In this episode we take a look at what our economy is doing from a National perspective. Some of the key take aways here include signs that we are seeing inflationary pressures beginning to ease, Bond Yields are continuing to come down and housing starts are beginning to increase again while we deal with sky rocketing rental increases.
Home sales in the month of June and no doubt in the month of July are down by a serious margin (-33% in BC and -36% in Ontario) and continue to stall out the market. While prices are coming down, it appears as though inventory is holding strong and hasn’t risen with only 3.1 months of inventory on the market. With strong national unemployment at 4.9% and record levels of immigration (over 400k) the fundamentals still look strong.
Locally speaking, we have entered into a Balanced market which is something we haven’t seen since January 2020! The median home price is also holding strong at 900k – although we suspect that will continue to fall as the Fed’s continue to raise rates throughout the rest of the year. BC is down 33% in home sales year over year and while BC’s inventory climbed +21% – the GVRD’s inventory remains largely unchanged.
It’s crazy to think that just a year ago, households were paying just 2.5% average interest rates across ALL outstanding debt….credit
cards, auto loans, mortgages, HELOCs….all of it but with higher interest on credit cards, rising levels of insolvencies (still low but rising), negative wage growth, falling prices and more expensive mortgages – Consumer confidence in Canada’s housing sector has fallen off the map. If you bought a house today with prevailing rates, you are paying 55% more in payments for the same home than you would have just 10 months ago.
Activity levels across major real estate offices is down on average by 15% and climbing – this is mostly because of the rising costs of borrowing and the continued cooling of home sales across the country. With the re-sale property market accounting for nearly 10% of our country’s GDP, it’s all but certain that a recession for part of 2023 is on our doorstep with the Central Banks attempt to control inflation.
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