{"id":19853,"date":"2022-05-06T11:11:00","date_gmt":"2022-05-06T18:11:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=19853"},"modified":"2022-04-22T16:45:27","modified_gmt":"2022-04-22T23:45:27","slug":"home-prices-to-drop-in-bc-more-than-any-other-province-amid-rate-hikes","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2022\/05\/home-prices-to-drop-in-bc-more-than-any-other-province-amid-rate-hikes\/","title":{"rendered":"Home Prices to Drop in BC More Than Any Other Province Amid Rate Hikes"},"content":{"rendered":"<p style=\"text-align: justify;\">Metro Vancouver\u2019s housing market may have met its match.<\/p>\n<p style=\"text-align: justify;\">The Bank of Canada has hiked its key rate twice in 2022, bringing the rate to 1% after sitting at historical lows amid the pandemic. This rapid rise in the overnight rate, which influences prime rates at banks, could be enough to induce an \u201cintense\u201d drop in housing prices in Metro Vancouver, according to forecasts from RBC.<\/p>\n<p style=\"text-align: justify;\">&#8220;Every buyer across the country will feel the pinch of rising rates. But those in the most expensive markets that will feel it most,&#8221; RBC assistant chief economist Robert Hogue said in a note Thursday.<\/p>\n<p style=\"text-align: justify;\">\u201cWe expect downward price pressure to be more intense in Vancouver, Toronto and other pricey markets. This will translate into larger annual price declines in 2023 in British Columbia and Ontario.\u201d<\/p>\n<p style=\"text-align: justify;\">RBC predicts average home prices in the province will hit $1.06 million this year \u2013 up 6.8% from a year ago \u2013 before falling to $1.02 million by the end of 2023.<\/p>\n<p style=\"text-align: justify;\">That 3.8% drop would be the largest decline among all provinces followed by Ontario at 2.3%.<\/p>\n<p style=\"text-align: justify;\">Meantime, Hogue predicts prices peaking this spring \u201cas market sentiment sours from extreme bullishness.<\/p>\n<p style=\"text-align: justify;\">\u201cIn this altered landscape, local markets could experience a mild price correction, partly reversing outsized gains recorded in the past year.\u201d<\/p>\n<p style=\"text-align: justify;\">The Bank of Canada is widely expected to raise its key rate by 50 basis points once again in June.<\/p>\n<p style=\"text-align: justify;\">And on Thursday the bank\u2019s governor, Tiff Macklem, left the door open to a potential 75-basis-point hike as well.<\/p>\n<p style=\"text-align: justify;\">BMO economists are forecasting two consecutive rate hikes of 50 basis points in June and July, which would bring the key rate from 0.25% to 2% in a matter of four months (RBC is less bullish on rate hikes, predicting the key rate will hit 2% closer to the fall).<\/p>\n<p style=\"text-align: justify;\">Either way, local homeowners face significant headaches with their budgets when it comes time to renew their mortgages.<\/p>\n<p style=\"text-align: justify;\">Hogue\u2019s report predicts monthly mortgage payments for Vancouver homeowners will go up by $526 for every 1 percentage point the key rate grows (based on the market value of typical homes as of the fourth quarter of 2021).<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/biv.com\/article\/2022\/04\/intense-price-drops-coming-vancouver-housing-market-next-year-rbc\" target=\"_blank\" rel=\"noopener\">RBC : &#8220;Intense&#8221; Price Drops Coming to Vancouver Housing Market Next Year<\/a> by Tyler Orton | BIV<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Metro Vancouver\u2019s housing market may have met its match. The Bank of Canada has hiked its key rate twice in 2022, bringing the rate to 1% after sitting at historical &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2022\/05\/home-prices-to-drop-in-bc-more-than-any-other-province-amid-rate-hikes\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-19853","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Home Prices to Drop in BC More Than Any Other Province Amid Rate Hikes &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2022\/05\/home-prices-to-drop-in-bc-more-than-any-other-province-amid-rate-hikes\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Home Prices to Drop in BC More Than Any Other Province Amid Rate Hikes &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Metro Vancouver\u2019s housing market may have met its match. 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