Good things expected in Okanagan real estate market as interest rates begin to stabilize
The quarter point increase in the key interest rate by the Bank of Canada today was expected and is likely to make some mortgages slightly more expensive but it came with a clear indication that it’s likely to be the last hike in the foreseeable future.
The central bank increased the interest rate to 4.5% marking the eighth consecutive hike since March in the face of decades-high inflation. It's the highest it’s been since 2007. It's expected to be its last interest rate hike of the cycle as it pauses to assess the effects of higher rates on the economy.
“That does create a sigh of relief in the sense that, we get what the playing field is now,” Faith Wilson, president and CEO of Faith Wilson/Christie’s International Real Estate told iNFOnews.ca. “Generally, there’s a fair amount of positivity despite all these rate increases. I think, the public has come to terms with the fact that rates have gone up.”
READ MORE: What the Bank of Canada's latest rate hike means for mortgage holders
The reality is interest rates are not likely to return to the record lows seen a couple of years ago, at least not for a very long time, she said.
“What is interesting is what is going to happen in Kelowna and the Okanagan,” Wilson said. “I was talking to an architect friend yesterday about what it looks like for Kelowna and Vancouver. With the pandemic, there was the ‘aha’ where younger families and individuals realized they weren’t stuck to Vancouver to have a job and that you can work from home and be elsewhere and still be OK.
“I see the Okanagan as having a younger, more vibrant population moving into the area and will continue to do so because that’s already happening.”
As the weather improves heading into spring there’s likely to be more housing coming on the market and more buying.
“There are people out there, younger folks, who are looking to purchase and they’ve got their ducks in a row and they can still move forward,” Wilson said.
While an interest hike may mean someone who could afford a $500,000 mortgage may now only be able to manage $450,000, increased supply should come with lower prices that may match their ability to pay.
Not that there’s going to be any kind of real estate boom. Most forecasters call for a slow 2023.
“We’re in a market cycle,” Wilson said. “This is not our first market cycle. The market has changed. It will slow down to a certain extent and there will be some moderation in price points – we’ve already seen that.
"I would still say you have to really look at location and product type and the data to see what’s going on in a particular neighbourhood, in a particular area, in a particular town or city to really have a good take on what’s going on in that marketplace.”
— With files from The Canadian Press
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