July 5th 2022
Real estate roundup: 5 big news stories trending this summer
So far in 2022, we’ve already witnessed a lot of change in the real estate markets in Toronto, Vancouver, and beyond, prompting many buyers and sellers like you to weigh their options with more scrutiny this year.
Now, information-gathering is more important than ever—and staying on top of the latest news can help you make an educated decision before moving within the current real estate market.
That’s why we’re recapping five big real estate news stories you should know about as we settle into summer, including:
- The Bank of Canada’s (BoC) June 1st interest rate hike
- How global banks are responding to world-wide inflation
- Smart strategies for firming up a down payment
- A new (free!) instant estimate tool that reveals home values in Toronto and Vancouver
- How homeowners are adding long-term value to their homes with eco-friendly changes
Let’s break it down.
The BoC raises interest rates (again)
On June 1st, the BoC raised its benchmark interest rate from 1% to 1.5%, which prompted many Canadians to redo their real estate math to determine how much they can afford to spend on buying a home. Why the rate hike? It’s all part of an ongoing effort to combat economic inflation.
Like us, you’re probably asking: how will another rate hike affect your buying plans? Here’s some helpful insight from two of our Properly experts:
- Buyers might now be at an advantage. Pricing Manager Arieh Dales predicts that “future buyers (in particular first-time homebuyers) could find themselves in a more advantageous position following the rate increase. Some investors may look to sell their investment units as the cost of borrowing goes up—and starter condos could see prices decline with rising inventory.”
- Sellers should consider more conservative home estimates. General Manager of Mortgages Muhammad Rashid says, “with more homes hitting the market, there will continue to be downward pressure on pricing. Use conservative estimates when determining what your home will sell for and how those funds will be used towards your next property.”
- Buyers and sellers should keep 4 things top of mind when navigating the real estate market. Adjusting your buying strategy; taking advantage of seasonality, less competition, and increased inventory; revisiting your mortgage options; and seeking out professional advice are all key strategies to consider right now.
Tip: Expect to adjust your calculations on July 13th, when the BoC will announce another increase in its benchmark interest rate—after that, you can expect all mortgage lenders to follow suit with their own interest rate increases, so now may be a good time to weigh your fixed-rate and variable-rate mortgage options.
Canada’s not alone: Central banks around the world are also tackling inflation
It started with rising oil prices in the wake of the war in Ukraine, but prices of most consumables quickly skyrocketed the world over.
Canada is among many nations across the globe tackling inflation. In a move similar to both the BoC and the U.S. Federal Reserve, the European Central Bank is raising interest rates in July and September to help curb spiralling costs. The Bank of England is poised to act “forcefully” and other central banks are making adjustments as well.
The aim is to lower inflation so that global citizens aren’t as deeply affected by mounting costs to buy essentials. While higher interest rates may initially drive up real estate and other big-ticket items, it will serve to quell the cost of living in the long term.
More Canadians are thinking strategically about how to secure a down payment
In light of the shifting market, prospective home buyers are considering all options for securing funds for a down payment. For many, this means exploring down payment assistance programs, such as the Canadian government’s Home Buyers’ Plan, or the first-time home buyer incentive—a federal program that offers loans of 5-10% of the purchase price of a home.
Another piece of the down payment puzzle? Look at fixed vs. variable mortgages. There are advantages and disadvantages to both and it’s important to consider them all.
Related article: Fixed vs. variable mortgages: which is better for today’s homebuyer?
A new instant estimate tool can tell you your home value (for free!)
Right now, with interest rates rising, and buying and selling behaviour changing, we’re seeing a shift towards a more balanced market. With so much change happening month over month, you may be curious to see how this is affecting your own home values, or the values of homes in neighbourhoods you aspire to live in.
Good news: a new free home value calculator can quell that curiosity. If you’re a homeowner in Toronto or Vancouver and you’re looking to make a move, the first thing you need is an accurate valuation of your house. Properly’s Instant Estimate tool is Canada’s most accurate free home value calculator, powered by AI technology that ensures its data is always up to date.
Home owners are adding more value with simple eco-friendly changes
Current home owners aren’t letting the shifting landscape stop them from thinking about increasing their home values in the long term. Many are exploring creative, earth-friendly ways to optimize their current space, and without breaking the bank.
And it’s hitting the news, too: CTV reported that experts are “seeing a growing demand for eco-friendly housing in Canada and around the world, with building standards becoming more energy efficient,” and with more home owners investing in “greener alternatives” when renovating or upgrading their existing homes.
Eco-friendly home improvements are a win-win-win-win: they increase your property value, lower your energy costs, reduce your carbon footprint, and add a splash of greenery to the scenery. This could include:
- Using upcycled furnishings
- Opting for chemical-free paint
- Adding electrical vehicle chargers
- Switching to LED lighting, and
- Upgrading appliances and thermostats.
Others looking to sell right now are being more thoughtful about giving their home a refresh, both inside and out. Whether its investing in minimal landscaping, cleaning up clutter, adding colourful accents and space-widening lighting, or changing small hardware, a simple change can add more value to a home, and get more buyers in the door.
Related Article: Inside & out: How to upgrade your home for sale
There’s always more to know about the real estate market
Want to stay on top of important real estate trends, strategies, and the inner workings of the industry? Bookmark our blog for information on virtually everything you need to know about buying or selling your home. We’re focused on rooting out all the details you can use to make informed decisions when it comes to buying, selling, and more.
Need some quick and personalized advice? We’ve got you covered. Schedule a free consultation with us! We’re here to help.
*DISCLAIMER: This article is provided for informational purposes only. It is not an exhaustive review of this topic. The content is not financial or investment advice. No professional relationship of any kind is formed between you and Properly, Properly Brokerage, or Properly Homes. While we have obtained or compiled this information from sources we believe to be reliable, we cannot and do not guarantee its accuracy. We recommend that you consult a trusted professional before taking any action related to this information. Properly is a tech-enabled real estate brokerage that is transforming the home buying and selling experience with AI-powered home valuations, Sale Assurance, and a modern streamlined service. We recommend that you compare and contrast your options, read the fine print, and conduct detailed research into any real estate, loan, and/or investment provider before using their services.*
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