February Real Estate Update

It is hard to believe January is already over. Is it my age, or is everyone feeling the time is going by faster?

In this newsletter I want to?emphasise our mortgage situation in Canada and what it means for?the Buyers. It does not look as bad as it seems for purchasing. For people with existing variable mortgages, they feel the increase and the difference.?My daughter Stephanie contributed to some of the figures below, as she is one of best Mortgage brokers in BC.

See her upcoming free live Webinar on Feb. 7, 2023 at 7:30pm below, or at?https://mortgagesbysteph.ca .

We had another increase of 0.25%.?This takes the overnight rate to 4.5%, a 15 year high!

The Bank of Canada?expect inflation to decrease to 3%?(from 6.30%) by mid 2023 and return to its target of 2% by 2024. By 2024 and 2025, we should see mortgage rates come down.

Some notes from the Bank of Canada press release:

• Canadian economic growth has been stronger than expected but remains in “excess demand.”
• Labour markets are still very tight, unemployment is at historic lows, and businesses are having difficulty finding workers.
• BOC estimates that Canada’s economy grew by 3.60% in 2022, with expected growth in 2023 of 1% and 2% in 2024.
• Inflation declined from 8.10% in June 2022 to 6.30% in December 2022, with lower gas prices helping drive down costs.
• Expectations for inflation are to come down to 3% by the middle of 2023 due to lower energy prices, improvement in global supply conditions and an overall economic slowdown due to current higher rates.

Is this a good time to buy real estate? I often get this asked.?The answer is yes!

Rate-sensitive markets like real estate have fallen over 20% depending on the individual market due to these rate increases.?This is an excellent opportunity for investors and new home buyers to take advantage of much lower real estate prices despite the current higher mortgage rates.?It’s worth noting that despite much higher rates with lower purchase values, the monthly payments in many cases are very similar. Either you pay top dollars in a high market, 100,000+ more with a lower interest rate, or purchase a property much lower, with higher interest rates.

Example:

Taking the average Canadian sold price,?a buyer today would save almost $160,000?on the down payment despite?having a higher monthly payment of $257.

With a short-term rate strategy, this buyer can lock in a 1-2 year fixed rate to ride out the current rate cycle and then be in a position to renew/refinance at future lower rates.

Whereas waiting until rates come down,?we could see real estate values return to growth, which would mean higher down payment requirements and more competition, especially as Canada expects to see a boom in immigration with more demand for housing over the next few years.

Live Webinar?with Stephanie Lefurgy (Denk) on Tuesday?Feb. 7, 2023 at 7:30 pm:

You will learn:

• How to pay off your mortgage faster, with a legal tax strategy that the wealthy have been monetizing for over 35+ years.
• Learn all about the Smith Manoeuvre.
• Build financial wealth for your future, and your kids future without having to spend more money.
• Guest Speaker Robinson Smith (the son of Fraser Smith who developed the Smith Manoeuvre) will speak about the little known Canadian tax law and the fundamentals of the revolutionary financial strategy.

I believe it will be a valuable talk, seats are filling, if interested go to?https://mortgagesbysteph.ca ?to register.

For real estate Stats about pricing and sales please see charts below.

Rank my Agent has announced that we are one of the Best Teams in Kelowna?- Okanagan. The public has voted us one of the most trusted and respected teams!?Thanks to all our clients for this incredible accomplishment!

Wishing you a great February! This slower market will recover. See you at the Webinar!

Best wishes,

Annette and Team

Quote of the day:?If the plan doesn’t work, change the plan, not the goal!

Okanagan’s best website to get the latest listings:??www.moveokanagan.com

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Move Okanagan Group – serving Kelowna – Lake Country – Vernon – Silver Star

www.moveokanagan.com

Not intended to solicit properties currently listed for sale/under contract. Based on MLS??active residential listings taken & sold units as reported by Association of Interior Realtors??in 2022 and YTD December 2022 for Central Okanagan.