February didn’t quite hit last year’s all-time record of 10,929 sales, dropping almost 17% over 2021 – but it still came in very strong at 9,097 sales. Prices are WAY up, however: last year’s February average was $1,044,957, and this year, it jumped 28% to $1,334,544. Prices are up significantly month-over-month, too – by almost $100K. January’s average price was $1,242,793.
Low supply is a major factor in those price increases – the number of new listings dropped 6.6% year-over-year, which means supply didn’t go down as much as sales did, which is something. The experts at TRREB are cautiously pointing to that as a sign of a market moving towards a “slight balancing.”
If you were buying or selling in this market, you probably didn’t notice a difference, though. It’s still super-competitive out there, with demand outpacing supply by a long shot, and properties are getting snapped up fast. Average listing days on market (DOM) is down dramatically over last year, from 14 days to only 9.
The Bank of Canada’s recent decision to raise the overnight rate by 25 basis points may cool things slightly. And while the plan is to raise rates incrementally over the next year, the uncertainty caused by the Russian invasion of Ukraine will have its own impact on financial conditions.
What does a rate hike mean to me?
If you’re a homeowner with a variable rate mortgage or a home equity line of credit (HELOC), you will be impacted by the change. If you’re locked into a fixed-rate loan, you won’t be affected until your next renewal date.
Not sure exactly what a 0.25% increase means in dollars and cents? According to James Harrison, a mortgage broker with Mortgages.ca, a 0.25% rate hike works out to about $12 more a month per $100,000 of your remaining mortgage amount. So if you have a $500,000 mortgage, you’re looking at paying out an additional $60 every month.
If you’re currently looking to buy a property, getting pre-approved before lenders announce the increase to their prime lending rate will lock you in to that rate for 120 days after pre-approval.
Got questions about the market? Talk to your Property.ca agent to get a read on what’s happening in real estate right now – and how it might affect you.