Oxford economics has predicted that by 2024 property prices will fall by 24%. Tony Stillo, Director of Canada Economics, states that the house prices themselves are the prominent reason behind this. In late 2021, real estate prices got 19% higher than a medium-income householder borrowing capacity. And in 2022, they are expected to increase by 38%, which is beyond the affording capacity of many average householders.
According to him, the second reason is the recent hike in interest rates by the bank of Canada. And it is predicted by oxford that this year there will be two-three more hikes. By mid-2024, the policymakers are expected to increase the interest rate to 2%. Oxford Report has also referenced the new policies made by the federal Liberal government.
How will it impact the investors?
Before jumping into this, let’s first remember the prediction made by oxford economics in the year 2020. According to them, the real estate market is expected to fall by 9% in 2021 but did this happen? You might have heard about the story of a gentleman named Marcus Licinius Crassus, who was the richest man in ancient Rome. He applied various moneymaking schemes, such as he used to turn up to burning buildings/houses and offering the owner to give them to him at decreased prices. If the owner refused to do so, he with his fire brigade would cheer the house burning. If he accepted the proposal, his slaves would put off the fire.
Real estate does not burn like houses, but the wrong decisions can make or break your investment.
If you get panic hearing such a forecast, you will be less likely to make a good decision. Rushing into a financial situation and selling your home at a price that is not worth its value will not give you profit at any cost, rather can drive you to huge losses. If you are anxious about your investment, it is best to take advice from the best commercial realtor in Cloverdale.
Why do you need to stay calm?
Oxford economics does not consider two crucial factors, such as:-
- The construction cost includes construction materials, labour costs, insurance requirements, etc.
- Every state and province in Canada is not the same. So, this report does not apply to all areas. Like, in the BC and Fraser valley areas, where the population is growing, and according to an estimate around 1.2 million immigrants will move to Vancouver in the next three years.
What does it mean for sellers and homeowners?
If you already have a home and don’t want to sell it, don’t worry; it will still be a valuable asset, which will benefit you in the long run despite the current projection. Continuing to pay for your house will help you own an asset that will pay you sooner or later. If the price drops as predicted and you are planning to buy a home, you can purchase a commercial property for sale near surrey at an affordable price. But before buying any property, make sure you have a pre-approved mortgage.
The bottom line
Real estate is a constantly changing market, so it is normal to get anxious. But ensure you don’t take big decisions in haste and cause yourself trouble. It’s better to consult a real estate expert before taking any big financial step.
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