As widely expected, the Bank of Canada held it's policy rate FLAT at 5% last week, marking the third time the BoC held rates flat since July of this year. CPI fell to 3.1% in October with a pending economic slowdown, economist struggle to see how the BoC would raise rates again, if we continue to see this downward trend. Recall, the BoC looks at Canada as a whole, not on a provincial or municipal level at that, for making key policy decisions.
The next policy announcement will be on January 24, 2024, where we'll get our next update.. but for now, no news is good news, providing some stability for both buyers and sellers of real estate. Based on historical performance, every time we see rates drop / decline / held flat, we expect an upturn in property prices a few months after. Will this time be different? Unlikely (rates down, asset prices up). But, as the bank would say – it all depends on inflation (CPI).
Given this, the Calgary Real Estate industry largely expects a even more robust demand come the spring time, on top of the already heated market (high immigration, high interprovincial migration, high business investment, etc.). Advice for Calgary real estate today: buy now, refinance later.
Source: Bank of Canada, Pillar9 MLS Data
Looking at the inventory trend across all property types in Calgary, we continue to be in a very undersupplied market (<2.5 months of inventory) – see below. From March this year to September, we've saw ~1 month of inventory across all property types, leading to a strong sellers' market.
Recently, we've seen a nice uptick in listings leading to ~2 months of supply (seasonal impact).
What will happen if rates drop, more buyers step in, and demand increases further? Mayhem.
Again, this is based on the numbers, facts and data. If you're thinking about waiting for prices to come down, you have to look at the fundamentals and the trend history – ask questions!
Source: Pillar9 MLS Data
Let me know how I can help – just a call / email / text away. Enjoy the holiday season!