It’s been quite a year for real estate in the Okanagan and across Canada. From a blazing hot housing market last spring, to interest rates going up for the first time in forever, it’s been a wild ride for those in the industry.
Read on to see what some of the big changes that came about recently.
Interest Rate Hike
From January 26, 2022 to January 26, 2023, the Bank of Canada raised the interest rate eight times. At the start of that time period, the interest rate was 0.25% and is now sitting at 4.5%.
The Bank of Canada said the rate hike was in response to the inflation rate that has been sky high since the middle of the pandemic. Increasing the interest rate is a common way to reduce inflation. It makes borrowing more expensive for Canadians and businesses, forcing them to put more money towards paying down debt and limiting spending.
Housing Supply Act
One of the first things Premier David Eby did when he took office was introduce the Housing Supply Act. This allows the BC government to set housing targets for municipalities, including availability and affordability. A municipality that is given a housing target needs to submit progress reports on those targets to ensure they’re being met.
The idea is it will see more affordable housing built in communities that are in desperate need of it.
Removal of Strata Restrictions
Along with the Housing Supply Act, amendments were made to the Strata Act. Due to many stratas not allowing owners to rent out their properties, it leaves properties empty when they could be occupied by long-term renters.
The 19+ age restriction has also been removed, as it forces young young adults that have started families to move out or not be allowed to buy at all.
The 55+ age restrictions that are currently in place were allowed to remain.
Foreign Buyer Ban
Canada has long had an issue with foreign individuals and companies buying up properties and sitting on them without actually living in them. This has caused a housing shortage as these empty properties are taken out of the buying and rental markets. It’s also caused housing prices to skyrocket in larger centres like Vancouver and Toronto.
The federal government announced a two year ban on foreign purchases of Canadian real estate. Anyone found out trying to assist foreign individuals or businesses in buying Canadian properties is subject to fines.
The government will reassess the ban in two years to see if it’s had the impact they’re hoping for.
Mandatory Cool-Down Period
Introduced in the spring of 2022, a mandatory cool-down period of three days was implemented last month.
In response to the overheated housing market in BC early last year, the provincial government decided a cool-down period was needed. There was very little supply, especially in the Okanagan, which saw bidding wars and buyers foregoing home inspections just so they could get the home.
This led to a lot of folks buying property they might not have had they known about issues with the house, which can lock them into a money pit they can’t really afford.
Ready To Buy?
A lot has happened in the housing market and it probably seems pretty overwhelming, but if you’re looking to get into the market, things could be working more in your favor now.
If you’re looking into buying or selling your home, the Mayne Brothers have over 40 years combined experience in the Central Okanagan and will help you navigate the housing market.
For more information, call 250-860-0303 any time, day or night.