There’s no question that the real estate market in British Columbia has been white-hot over the last year. Since the pandemic began in March 2020, we’ve seen significant year-over-year increases in sales and home prices across the province. The province has now entered phase three of BC’s Restart Plan, as an increasing percentage of the population has been vaccinated, and fewer individuals are testing positive for COVID-19. If case numbers and hospitalizations continue to decline, BC should enter phase four around September 7, 2021.
With such rapid changes taking place, there are dozens of trends to watch that could affect BC’s real estate market. COVID-19 changed the real estate landscape in BC, and its departure will continue to impact the market. Here are eight real estate trends you should be watching closely as BC reopens.
1. The Impact of Rising Interest Rates
When the pandemic began, the Bank of Canada brought interest rates to all-time lows to soften the impact of job losses and a slowing economy. Rates have remained at 0.25 percent throughout the last year.
Benjamin Tal, the Deputy Chief Economist at CIBC, says that the sensitivity to higher interest rates is “the number one issue facing the Canadian economy.” Though the US Federal Reserve has indicated that they won’t touch interest rates until 2023, Tal believes that Canada could move quicker. As interest rates in Canada return to pre-pandemic levels, it’s expected that home price growth could slow.
