'Uncharted territory' in our 'microclimate': What can we expect?

Real Estate in qathet

BY PIETA WOOLLEY

Wild real estate isn’t impacting just us here in qathet, or even just in Canada. Across the globe, the pandemic hit real estate in similar ways, and economists are predicting similar patterns of increasing stability and recovery.

From the UK, The Economist magazine reports that, “From Stockholm to Sydney the buying power of borrowers is collapsing [due to interest rate hikes in several countries worldwide].”

That of course is true here too. The Bank of Canada meets again March 8, and may introduce further interest rate hikes. At press time, the Bank of Canada interest rate was 4.5%, the highest it’s been in this country since 2007 – although experts are guessing those hikes will start rolling backwards soon.

The Economist also points out that when people can’t afford to move or even find homes to buy, employers can struggle to find workers. The ripple effect of an extreme and unstable real estate market can slow people’s spending and inflame a recession, and make a tense cost-of-living era more precarious for many people. The good news is, the worst seems to be over, according to experts, and they’re expecting 2023 and 2024’s real estate market to stabilize and even rebound.

In its first quarterly report this year, the Canadian Real Estate Association notes that provinces with the historically highest home prices – BC and Ontario – have experienced the biggest sales and price declines, as buyers are looking for more affordable markets (again, qathet is a “microclimate” of relative affordability.) But the CREA still expects half a million Canadian homes to change hands this year – about the same as 2022 and on-par with pre-pandemic levels.

In BC, the CREA expects home sales will rebound slightly this year, and even more in 2024. And although CREA expects prices to decline by 7% in BC this year, they’ll rebound next year.

Is any of this helpful in assessing qathet’s situation? Not particularly. Compare January 2022 to January 2023, and median prices here were down just 3% – the smallest annual decline of any real estate region in BC, where the average decline was 16.1%. In other words, homes here are retaining their value (minus the spike in prices in the early summer of 2022) more than anywhere else in BC.

Instead, it’s probably most helpful to just hear human stories, real stories, to imagine how 2023’s market may go. And, more importantly, what that means for all of us.