bravo festival condos floor plan.Canadian house price K line is shocking! Benchmark Canadian housing prices fell another C $27400 in July, down 3.4 per cent from a month earlier, according to data released by the Canadian Real Estate Association.Please Visit: bravo festival condos floor plan to Get Your VVIP Registration Today!
Although the benchmark Canadian house price of C $782300 in July 2022 is still 10.9% higher than in July 2021, if the current month-on-month decline is maintained, house prices are expected to recoup all the 2021 increases by the end of 2022.
RBC Bank points out that benchmark housing prices in July 2022 have not yet demonstrated the power of a single 1 per cent increase in interest rates. The real estate transaction data in August may shock the market even more.
As can be seen from the K chart, house prices are duty-bound to rise and never hesitate to fall. If this trend is maintained in the next few months, you can stretch the line along the curvature of the decline, and the buyer standing at the top will have no tears.
This chart shows the growth rate of benchmark housing prices in Canada over the past 12 months. Compared with the price K line, the downward trend is more obvious and firm.
Canadian house prices peaked in March 2022, and benchmark home prices fell C $86000, or 9.9%, from their peak in July 2022, in just four months, according to CREA.
CREA said that raising interest rates limits the ability of the market to raise funds, but what is more fatal is to deal a heavy blow to the speculative mentality.
‘If we attribute the main reason for this correction in house prices to successive, substantial and reckless interest rate increases by the Bank of Canada, ‘Mr. Huang said. Then, the statement of the Bank of Canada is crucial.
Just on Friday, the Bank of Canada hinted in a social media post that the first stop of this round of interest rate hikes is 3.25%, and then the central bank will decide whether to continue to raise interest rates depending on inflation.
The main points of the article include:
1. The central bank wants to keep inflation (CPI) at around 2 per cent (fluctuating up and down by no more than 1 per cent), and raising interest rates is the only option until this target is achieved.
2. If the benchmark interest rate rises to 3.25%, Canadians will lose about 1% of their disposable income. But not raising interest rates means that Canadians lose 8% of their disposable income each year.
3. Raising interest rates will hurt some mortgage holders, but not raising interest rates will affect all households in Canada.
The meaning behind this more formal text is that in order to protect the interests of most Canadian families, we must raise interest rates to curb inflation at the expense of a small number of house slaves.
In fact, a long time ago, Canadian media and financial institutions repeatedly stressed that the Bank of Canada is not an elected institution, the governor of the central bank is not responsible for public opinion, and it is not an issue for the central bank to suppress or stimulate house prices. Inflation and unemployment are the only two data that the central bank needs to pay attention to.
At present, the Bank of Canada has been raised by the benchmark interest rate to 2.5%, 0.75% short of 3.25%.
Last week, a number of institutions predicted that if the inflation rate announced by Statistics Canada this week is still higher than 7%, then the target of raising interest rates by 0.75% and 3.25% in September will be achieved in one step!
Judging from the article released by the central bank, it is almost certain that the Bank of Canada will raise interest rates to 3.25%, but 3.25% may not be the upper limit of this round of interest rate hikes.
Huang Sanshui said that predictions of raising interest rates are everywhere, but different institutions and individuals have their own tendencies. For example, commercial banks will exaggerate the expectation of the central bank to raise interest rates because of risk control, while real estate companies will play down the expectation of raising interest rates in order to maintain the heat of the market.
But so far, no one has dared to predict where the end of the rate hike will be, how long it will last at the highest point, and how long the impact on the housing market will last.
‘The buyers are also in a dilemma, ‘Mr. Huang said. Raising interest rates can bring down house prices, but it also reduces buyers’ ability to borrow. As house prices fall, buyers will be surprised to find that the houses they can afford are cheaper, but they can’t afford them.
1. Buyers who have been pre-approved when interest rates are low.
2. Foreign buyers who will be turned away after January 2023.
So whether the real estate market is positive or negative. I am afraid it will not be known until January next year, but when the rigid demand forced by the policy has been digested, the true willingness of the market to buy will be clear.