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Given their direct impact on mortgage costs, interest rates have a big influence on real estate. Today, as interest rates continue to rise, the housing landscape across Ontario is beginning to shift. After nearly two years of an active seller’s market, new trends are beginning to emerge.
Here’s what you need to know.
Real estate in the Bay of Quinte region has seen a lot of growth in the past decade. While some communities were impacted more than others, housing prices for the most part climbed steadily through the 2010s. Then in early 2020, the market would see an unprecedented boost in activity.
During the early months of the COVID-19 pandemic, the Bank of Canada drastically lowered their target interest rate in an effort to reduce economic damages. As a result of this drop, mortgages suddenly became more affordable for Canadians and a huge influx of buyers entered the market almost overnight. This led to an incredibly competitive seller’s market in most areas around the province. Housing prices consistently broke records and bidding wars became the norm.
Rising Interest Rates
In March of 2022, the Bank of Canada announced it would be finally raising its target interest rate in order to combat growing inflation. Since then, recurring hikes have lifted the target rate from 0.25% to 2.5%. As mortgages are now more expensive, this sharp increase has priced a fair number of previously-eligible buyers out of the market.
With costly mortgages, fewer buyers today are entering the market compared to the past two years. As a result, Bay of Quinte real estate has slowed down noticeably. That being said, a slower market doesn’t mean conditions have flipped altogether. In reality, things are steadily becoming more balanced.
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Despite fewer buyers in today’s market, homes are still being listed for sale at similar rates compared to the past few years. As available housing supply is now slowly catching up to demand, the previously hot seller’s market is starting to cool off. However, despite this slower pace, real estate in the Bay of Quinte hasn’t done a complete 180.
While some dynamics are shifting, we aren’t exactly seeing a buyer’s market. In actuality, conditions are fairly balanced, with both buyers and sellers finding success. Rather than falling, housing prices have remained stable. While this could change in the future, sellers can still feel confident in today’s market.
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What Buyers Should Know
Although it may be more difficult to secure financing for a new home, buyers who are able to afford a mortgage will experience a more laid-back buying process compared to the past two years.
With less competition in the market, buyers can be less aggressive and take their time while buying a home. While prices are stable, less buyer competition also means fewer multi-offer scenarios where buyers will have to bid against each other. Competitive tactics such as bully offers have also become less common.
Plus, as more homes remain available on the market, today’s buyers have more properties to choose from during their search. This can allow buyers to be patient and not compromise on important details.
What Sellers Should Know
Although some sellers may feel like they’ve missed out on getting the best price for their home, that’s not the case. While some of these emerging trends do favour buyers, sellers still have plenty of opportunities to find success as the market balances out. If you’re looking to sell your home, the best place to start is with a real estate agent.
A great agent can help you prepare your home for the market to maximize ROI. Then they’ll incorporate the latest marketing and presentation strategies to ensure your home attracts the right buyers.
Look to buy or sell? As experienced local agents, we can help you navigate the shifting market. Contact us.