Market Update - September 2023

The Bank of Canada held the overnight interest rate at 5% this month. Here’s our perspective:

Interest Rate

On September 6th, the Bank of Canada held the overnight interest rate at 5%. It seems that the aggressive increases from 2022 are being felt by Canadians - the unemployment rate was up slightly (to 5.5%), and GDP was down (in Q2 2023) for the first time since the start of the pandemic (cbc.ca/news). Analysts indicate that the full effect of a rate increase may not be felt until 18 months after, this could mean that the economy will continue to see impacts like these into next year. The next interest rate announcement will be on October 25, 2023.

Price Trend

Sales prices declined in August for the first time in about six months. We are noticing buyer hesitancy due to the impact of rates on affordability. Looking at the 6-year trend, current prices are similar to what we saw in 2021.

What does the current market mean for you?

Buyers – The market has cooled off from the summer. You can expect to have negotiating leverage when working with sellers. We recommend targeting properties that have been on the market for over 2 weeks, or those with offer dates – there may not be competition from other buyers.

Sellers – When looking at sold comparables for your property, keep in mind that prices have dropped. If you’re looking to buy and sell - we recommend selling first. It can lead to a stressful situation if you buy first and the market continues to drop while trying to sell. Please reach out if you’d like to discuss a strategy on how to sell your home quickly!