Government stimulus and the changing work requirements are continuing to shape the real estate market. The low interest rates assisted by government bond buying and government assistance programs have kept the real estate market active. The November sales were 24.6% above the 10-year November sales average. The second highest November sales on record.
With more jobs allowing for work from home, condos in the city have fallen out of favor. This is allowing people to move further from the city to find value. Increased workspace and a yard have become more important. These factors explain the why townhouses are in high demand and why apartment prices dropped over the last month. This also shines a light on why the Sunshine Coast had an 82.8% increase in sales over the last year.
The sales-to-active listings ratio for November is 27.9% for detached homes, 40.1% for townhomes and 23.9% for apartments. Above 20% indicates upward price momentum.
The MLS Home Price Index composite benchmark price for detached homes is $1,538,900. This is a 9.4% increase from last year and 1% increase from October. For attached homes, the benchmark price is $814,800. This is a 5.6% increase from last year and a 0.2% increase compared to October. For apartment homes, the benchmark price is $676,500. This is a 3.4% increase from last year and a 1% decrease from October!
The Bank of Canada has left the current policy rate untouched at 0.25%. It has added that they do not expect to raise rates until sometimes in 2023 according to their projections.
We are still getting predictions for real estate price drops next year, but these predictions have not panned out so far. When you look at how much money the Canadian government has put into the economy in terms of percentage of GDP, it leads all developed countries at around 16%. US is only around 8%. And the government has already committed billions more. It is hard to appreciate how this warps the economy. I would not be surprised if the real estate prices do not drop at all with the exception of condos in some select markets.
