• Pre-Construction
  • Search By Map
  • Developers
  • Trending News
  • Contact Us
Menu
  • Pre-Construction
  • Search By Map
  • Developers
  • Trending News
  • Contact Us
Login
Langstaff Gateway Condos by Kylemore.The housing market plummeted to 2024!

Langstaff Gateway Condos by Kylemore.The housing market plummeted to 2024!

Posted on August 4, 2022

Langstaff Gateway Condos by Kylemore.The housing market plummeted to 2024! The Bank of Canada will raise interest rates by 0.75 per cent, pushing them up from 1.5 per cent to 2.25 per cent, the fourth consecutive increase this year after a low of 0.25 per cent during the two-year epidemic.Please Visit: Langstaff Gateway Condos by Kylemore to Get Your VVIP Registration Today!

The last time interest rates exceeded 2.25% was in April 2009, after the 2008 recession, but mortgage rates were only 3.85% and there was no need for stress tests.

Michael Carney, director of business development at HouseSigma, a home sales platform, said the central bank’s benchmark interest rate had never exceeded 1.75 per cent since 2016, which would put Canada’s mortgage stress tests into “uncharted territory”.

Raising interest rates is challenging not only for new lenders who want to enter the housing market, but also for those who already have mortgages. Now, lenders need to prove that they can handle mortgages at higher interest rates. The current lending rate is 5.25% or 2% higher than the benchmark rate offered by the central bank, whichever is higher.

The central bank says raising interest rates is a measure to deal with soaring house prices and curb high inflation. Canada’s inflation rate reached 7.7% in May from a year earlier, making it the highest consumer price increase since 1983.

The supply of goods and services does not match the demand during the recovery of the epidemic. The Bank of Canada estimates that demand for goods and services will exceed the production capacity of the economy.

War in Ukraine pushes up energy and commodity prices.

Global supply chain problems.

Following the fourth rate hike expected on July 13, analysts expect two more rate hikes before the end of the year. Previous interest rate hikes took place between March and June.

According to Bob Dugan, chief economist of the Canadian Mortgage and Housing Corporation (CMHC), the Bank of Canada has two ways to raise benchmark interest rates:

The Bank of Canada’s interest rate will reach 2.5% at the beginning of 2023 and remain at that level until the end of 2025. He believes that because of the heavy debt burden, many households remain sensitive to rising interest rates. This moderate interest rate of 2.5% will neither stimulate economic growth nor cause the economy to contract.

Moderate interest rates will limit Canada’s GDP growth to 4.1% in 2022 and 22% in 2023.

High interest rates will dampen GDP growth even more, from 3.4 per cent in 2022 to 0.7 per cent in 2023. High interest rates will trigger a “mild recession” between late 2022 and early 2023.

With high interest rates, the unemployment rate will reach 7 per cent in early 2023, up from an all-time low of 4.9 per cent in June 2022.

Of course, the resulting higher unemployment and slower wage growth will make it harder for people to own their own homes, and higher interest rates will increase construction costs.

The Canadian Mortgage and Housing Corporation (CMHC) is reported to have revised its forecast on the grounds that the central bank may continue to raise benchmark interest rates sharply to slow runaway inflation. This will make it harder for residents to afford their mortgages.

Now, CMHC has lowered its forecast for house price increases from 2021 to 2022, and the average price is expected to rise 11% instead of 13.7%. The forecast is for the whole year, including the first quarter of this year, when house prices peaked.

A blog post on CMHC also predicts that the average house price in Canada will fall by as much as 5% from the first quarter of this year to the second quarter of next year, to a low of $742970.

House prices have fallen since the central bank began raising interest rates in March, and Mr Dugan said he was “cautious” about predicting a sharper fall in house prices with such a severe housing shortage.

“I find it hard to believe that there will be a very big correction in prices,” Dugan said. “I don’t want to say it’s impossible. As some say, a 10% price correction is possible. But I am skeptical because of the shortage of supply. ”

Private sector economists predict that average house prices in Canada could fall by as much as 20 per cent. Toronto-based TD expects house prices to fall 19% in the same period in 2023 compared with the first quarter of this year.

  • Langstaff Gateway Condos by Kylemore

Leave a Reply Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Recent Posts

  • 8 Elm Condos.It plummeted 20%!
  • EMBLEM The Design District.The price of Canadian cars has also gone up after house prices
  • Daniels Brampton.Emergency resale of Toronto uncompleted flats!
  • Union city downtown Markham.Low interest rates are pushing up house prices in Canada!
  • Festival condos address.Will house prices still rise by 5.0%?
CondoTrendLogo png v2

Locations

  • Toronto
  • Mississauga
  • Markham
  • North York
  • Richmond Hill
  • Scarborough
  • Calgary
  • Hamilton
  • Etobicoke
  • Vaughan
  • Burlington
  • Newmarket
  • Kitchener
  • Whitby
  • Milton
  • Halton Hills
  • Ajax
  • Belleville
  • Airdrie
  • The Blue Mountain
  • Wasaga Beach

Occupancy

  • Occupancy 2021
  • Occupancy 2022
  • Occupancy 2023
  • Occupancy 2024
  • Occupancy 2025
  • Occupancy 2026
  • Occupancy 2027
  • Occupancy 2028
  • Occupancy 2029
  • Completed

Type

  • High-Rise Condos
  • Low-Rise Condos

Status

  • Now Selling
  • Coming Soon
  • Completed

7481 Woodbine Ave #203, Markham, ON L3R 2W1  (647) 806-8188

Copyright © 2021 CondoTrend. All rights reserved.