House Price Factors
The return of relatively lower interest rates (historically in Canada, interest rates have ranged between 5-6%) and increasing demand for housing are two factors driving this surge in the housing market.
Another factor is massive immigration numbers – approximately 500,000 new Canadians are set to join our ranks this year. That’s a 1.3% increase for 2023.
With lower mortgage rates, many people are looking to take advantage of the opportunity and purchase a new property before the market gets too hot.
Even rental properties are looking appealing with a 5% fixed rate still allowing for positive cashflow on investment real estate in some markets. See related post explaining the math HERE.
As a result, home prices in Canada have risen by an average of 2.2% in the past month alone, giving homeowners some relief from concerns about decreasing property values.