This year, we saw our interest rate rise by 3.75% through the Bank of Canada; the highest increase in more than 20 years. As a result, homeowners and buyers alike are now asking the big question:
Historically, increased interest rates certainly impact buying or selling your property. In layman terms, higher interest rates tend to have three main impacts:
People will eventually be able to view more properties without having to buy sight unseen or bid above the asking price. There will be more demand for both sellers and buyers. And although mortgage rates have increased, it’s predicted that monthly payments should only jump a little for the average person in BC. However for anyone struggling, there’s also tools such as extending the amortization if payments are too much for the homeowner.
"What does this mean for me?"
Historically, increased interest rates certainly impact buying or selling your property. In layman terms, higher interest rates tend to have three main impacts:
- Your monthly mortgage payments increase
- The market value for your property drops
- Higher mortgage rates mean it’s more difficult to buy a property
In BC, it’s reported that housing sales have returned to what was once a “normal level” of sales. Which ultimately means less sales are happening right now in what was an incredibly competitive market. It’s also expected there may be a further fall in 2023, but it’s important to note this isn’t expected to last.
Where’s the benefit in all this?
We’ve touched briefly upon the cons, from a mortgage rate increase to being unable to buy your desired property right now. But although it may seem like a scary time for homeowners and buyers, it’s not all doom and gloom.
Increased interest rates will actually help slow inflation caused by COVID-19 and the unfortunate war in Ukraine. As a result, this will help restore our economy and parallel to that, restore our housing market.
Increased interest rates will actually help slow inflation caused by COVID-19 and the unfortunate war in Ukraine. As a result, this will help restore our economy and parallel to that, restore our housing market.
People will eventually be able to view more properties without having to buy sight unseen or bid above the asking price. There will be more demand for both sellers and buyers. And although mortgage rates have increased, it’s predicted that monthly payments should only jump a little for the average person in BC. However for anyone struggling, there’s also tools such as extending the amortization if payments are too much for the homeowner.
The bottom line?
Housing markets are always shifting and there’s always an element of the unknown when purchasing a property. Sometimes you purchase a new home and the value doesn’t match what you paid or you run into unforeseen problems that your inspector was unable to forecast. The silver lining in this situation is that historical trends indicate current low housing sales and increased interest rates aren’t permanent. A slower economy means less spending and eventually, lower mortgage interest rates and more home purchases will follow.
As the saying goes: “What goes up to slow the economy, will eventually come down to stimulate the economy.”
The best thing you can do right now is seek expert advice from a Whistler realtor you trust (or realtor in your location) before making any big decisions. If you would like to chat with me personally, I am just one phone call or email away and am happy to discuss your current goals or concerns.
What do increased interest rates mean for the Whistler housing market?
Fortunately for Whistler homeowners and buyers, our little village is a bit of an anomaly and the market remains steady. Buyers in this location are largely those with discretionary income, which means houses remain affordable and although it may seem shocking at first glance, interest rates on the whole are still relatively low. For homeowners, many Whistler properties also allow for rental revenue and investments, which means there’s an opportunity for extra income during this time.
If anything, the interest rate rise may impact first time home buyers due to increased stress tests. However in general, the reports on BC’s market drop and stats as a whole may not transfer to the Whistler housing market.
My top tips to help with interest rate rise:
With over 22 years in the real estate industry (and 35 as a Whistler local), I know first-hand buying or selling a property can feel overwhelming. Throw in an economic downturn - and you might be nervous to make decisions right now. That’s why working with the right real estate agent is crucial to a smooth journey, from the first moment you discuss your wish list to holding a new set of freshly cut keys in your hands.
Get in touch today.
- Reduce expenses so you have more to pay down mortgage or save
- Find ways to increase your income like room rental or Airbnb
- Lock in mortgage rates if you have a variable rate
- Take your time with your housing decisions
- Get expert advice from a Whistler realtor you trust
With over 22 years in the real estate industry (and 35 as a Whistler local), I know first-hand buying or selling a property can feel overwhelming. Throw in an economic downturn - and you might be nervous to make decisions right now. That’s why working with the right real estate agent is crucial to a smooth journey, from the first moment you discuss your wish list to holding a new set of freshly cut keys in your hands.
Get in touch today.