Too Tight? The Impact of Bank of Canada Tightening on BC Housing Markets



Later this year, the Bank of Canada is widely expected to embark on its first interest rate tightening cycle since 2018. In this Market Intelligence, Too Tight? The Impact of Bank of Canada Tightening on BC Housing Markets, we will consider how high interest rates might rise and using both historical data and model simulations, we analyze how BC housing markets may be impacted.

Click here to read the full report. 

Summary Findings:

1.The Bank of Canada is signalling that in response to elevated Canadian inflation, it will begin raising its policy rate or “tightening” monetary policy this year.

2. Historically, Bank of Canada tightening has led to falling home sales and flattening home prices.

3. With markets so out-of-balance, it will take a substantial decline in demand to return active listings to a healthy state. 

4. Model simulations show that the most likely outcome of this round of Bank of Canada tightening will be home sales falling to near their historical averages and for home price growth to moderate, but because of severely low supply, it is unlikely to result in significant home price declines.

For more information, please contact: Gino Pezzani.

Comments:
No comments

Post Your Comment:

The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.