2022 was a tough year for many Canadians faced with either purchasing a home while interest rates were rising or with renewing their current mortgage while rates nosed an upward trajectory.
Prices of homes across the country during this time saw a significant dip – in some cities as much as -20%. While the Bank of Canada paused their rate increase for a short time at the beginning of 2023, at their most recent meeting, they raised the overnight rate to 5%. Yet across the country, home prices on average have gained back a significant portion of the percentage they fell by.
Most major cities across the country, apart from Calgary, AB, have seen increases in home prices by at least one third of the amount they fell. While most areas are still below their previous peak by at least 5 – 10%, Calgary’s home prices rebounded to their peak in early 2022 and have surpassed that high by 5% as of July 2023.
Notably, Vancouver’s prices are now less than 5% lower than their peak in Feb 2022. Having only had a price drop of approximately 10% overall, the market is well on its way to recovery despite the tripling of interest rates. In all, Calgary, St Johns and Saskatoon have surpassed their respective “peaks” of 2022.
While it would seem that the interest rates cooled prices somewhat last year, as consumers have adjusted their expectations of interest rates, prices have started ticking upwards again. Afterall, 5% is a rather “normal” rate to pay, when looking at the average of interest rates over the past 30 years.
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