How the Bank of Canada's rate hike affects you

Posted on June 6, 2023 by Vancouver Home Team

    Let's break it down:

Sellers : An increase in interest rates will lead to higher borrowing costs for potential buyers that need financing. This can reduce the purchasing power of buyers and potentially decrease the demand for homes. As a result, sellers might experience a slowdown in the real estate market, which could lead to longer listing times and possibly, and potentially fewer offers even lower selling prices.
However, it's important to note that various factors, including market conditions and economic indicators, can influence the overall impact on sellers. With all that taken into effect, I've been saying for years that one of the biggest factors is inventory, inventory, or lack of it!

Buyers : Higher interest rates mean increased borrowing costs for almost all homebuyers. This will lead to higher mortgage payments and potentially reduce the purchasing power of buyers that need a mortgage to purchase your home ( all non cash buyers) As a result, some buyers may be discouraged from entering the market or may need to adjust their budget and expectations. However, higher interest rates can also indicate a strengthening economy, which may lead to increased job security and income growth, benefiting potential buyers.
It's important to recognize that the real estate market is influenced by numerous factors, including supply and demand ( inventory ) dynamics, economic conditions, and buyer sentiment. The impact of an interest rate change can vary depending on these factors and the specific context of our housing market which is currently a Sellers market.

If you're a seller or buyer in the Vancouver, Greater Vancouver or Fraser Valley area, it's always a good idea to connect with us, as we closely monitor the Vancouver and area real estate market. 
We here at RE/MAX are your real estate professionals who can provide you with the insights and guidance based on your specific individual needs. Give us a call.
We’ll always make time for you!