With the end of a new year and the start of a new one, speculation is focusing on what the Bank of Canada rates will be in 2023. The Bank of Canada rate is what is used by lenders to calculate mortgage rates and this is the single most important factor that affects home buying in Canada.
The CEO of RateHub.ca, James Larid, boldly predicts that the Bank of Canada “will likely hold its benchmark overnight rate at 4.25% for the duration of 2023”. This may result in a modest decline in fixed mortgage rates throughout the year. Larid further goes on to predict that prices for homes in 2023 will remain flat and there will be no further declines in pricing.
Laird is expecting home prices to remain flat throughout 2023, as they have already declined by 10% to 20% from their peak, and no further declines are likely at this point.
The outlook from Laird is optimistic in terms of the outlook for home sales:
However, demand will be galvanized by two specific demographics.
“New Canadians and first-time homebuyers will drive demand for more housing,” Laird said. “The federal government is targeting 465,000 newcomers in 2023. Fifty-one per cent (51%) of Canadian millennials say they plan to purchase a home within the next five years.”
Further incentives will help to stop the decline in home sales including the launch of the Tax-Free First Home Savings Account. Laird states that “this is a very strong no-tax vehicle that will help first-time homebuyers who are trying to save for a down payment.”
For all of your home buying and selling questions, please contact our team of experts. We are here to assist you in all areas of purchasing or home selling and our goal is to reduce the stress for you and your family throughout the journey.
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