Calgary Real Estate Market

To say no one is buying is an overstatement, but slow sales activity in the Calgary Real Estate Market persists. Sellers, where possible, are holding off on listing, but sales activity hasn’t been strong enough to impact inventory levels.

I have a number of buyers looking for properties. Yet, despite the elevated inventory levels (over 11% higher than this time in 2018), they claim they aren’t finding what they want. I’m also finding that a number of clients are still managing to find themselves in a multiple offer situation.

Buyers’ Market?

Some have been thinking that they’re going to get a “deal” with the current market environment. Then they end up in a competitive situation. Is this because they have unrealistic expectations, regardless of what their REALTOR® is telling them?

Mortgage Rates

Then we have the rate factor and the current qualifying rules. We know that it takes months, even a couple of years, for the impact of an increase in interest rates to be felt.

The Bank of Canada (BoC) has raised its overnight rate five times since July 2017. The goal of these rate hikes is to keep inflation between 1.5%-2%.  Inflation data for February shows inflation fell to 1.4%. Are we now feeling the impact of those five hikes in under 18 months?

Regardless, the B0C is not expected to raise its key lending rate on Wednesday, at its next scheduled announcement. Expectation of further increases this year is also dwindling.

We expect that the BoC, based on current economic data, will change its tune with respect to more rate hikes in 2018.If it does, we expect to see the bond yield weaken and potentially for fixed rates to drop.

Obviously, no change in the overnight rate also means no change in variable rates either. Good news for those with adjustable and variable mortgage terms, lines of credit etc.

Mortgage Rules

Both the federal Conservative and NDP parties, along with Mortgage Professionals Canada, are still advocating for a shift in the qualification rules. They are also lobbying to bring back 30-year amortizations. While we’ve seen no movement on this yet, I expect that as a federal election looms, we may see some favourable action.

Perhaps the current rate environment and the possibility of loosening rules will help boost the spring real estate market?