Higher for longer
Why it’s time for borrowers to accept the new normal of higher rates ― and plan accordingly
INFLATION. INFLATION. INFLATION. Yesterday, the inflation numbers arrived, and the news was positive, but with a caveat. According to data from Statistics Canada, Inflation fell from four per cent in August to 3.8 per cent in September ― a step in the right direction.
However, there’s continued concern regarding inflation expectations among consumers and businesses. Not much of our daily experience as Canadians suggests prices are moderating, so our tendency is to trust our lived experience rather than the measured aggregates. This concerns the central bank, because if we still believe prices are climbing, we’ll spend now rather than wait, thus perpetuating upward pricing pressures. It’s a vicious circle.
“Interest and mortgage rates may stay relatively constant for many, many months”
As the economy slows and inflation continues, we are suffering from stagflation ― a very tough calamity for the central bank to manage. Lowering rates to stem the economic slowdown risks inadvertently fueling inflation. Raise rates to control inflation and the economic downturn worsens. It’s a catch-22.
Perhaps the takeaway from this is to not expect a significant change for some time. Interest and mortgage rates may stay relatively constant for many, many months.
Real estate activity in our market continues to be very tepid, with just 87 transactions in the past week ― about half the historic volume for this period. The national numbers also illustrate price declines, slowing volume and growing inventory.
Buyers rule in this market. As a buyer, remember that lenders are increasingly careful as falling prices and climbing rates have them being exceedingly cautious. Don’t buy anything before you’ve locked down funding. Get expert advice to ensure your homebuying journey is a positive one.
In other related news, there have been several exciting developments in London’s real estate sector. Yesterday, city council approved York Developments’ pair of mixed-use towers at the Forks of the Thames, bringing unprecedented density for the downtown. There are many cranes on our horizon, and more on the way. The BRT work circling and pushing out from our core is taking shape. The Whole of Community System Response is succeeding as well, bringing much needed supportive housing to the city to go along with the recently announced initial hubs. There are many reasons to be optimistic about our city!
Market analysis provided by Marcus Plowright, Sales Representative, A Team London. Marcus can be reached at 519-872-8326 or [email protected].
High- and low-priced real estate listings around town this week
London East
Low
Address: 1106-573 Mornington Avenue
MLS number: 40472962
List price: $179,900
Days on market: 57
Size: 1 bedroom, 1 bathroom, 680 square feet
Listing agent: Sean Monteith, Sales Representative, Nu-Vista Premiere Realty Inc.
High
Address: 1474 Kilally Road
MLS number: 40498125
List price: $2,699,900
Days on market: 6
Size: 4 bedrooms, 2 bathrooms, 1,950 square feet
Listing agent: Mohammed Moosavi, Broker, Century 21 First Canadian Corp.
London North
Low
Address: 312-600 Grenfell Drive
MLS number: 40480620
List price: $319,900
Days on market: 36
Size: 1 bedroom, 1 bathroom, 859 square feet
Listing agent: Dean Soufan, Broker, Century 21 First Canadian Corp.
High
Address: 15 Denali Terrace
MLS number: 40470666
List price: $4,250,000
Days on market: 60
Size: 6 bedrooms, 5 bathrooms, 7,516 square feet
Listing agent: Mike Sloan, Sales Representative, Royal Lepage Triland Realty
London South & West
Low
Address: 55-198 Springbank Drive
MLS number: 40493560
List price: $80,000
Days on market: 16
Size: 1 bedroom, 1 bathroom, 760 square feet
Listing agent: Karen Greason, Broker, Re/Max Centre City Realty Inc.
High
Address: 75 Woods Edge Close
MLS number: 40445791
List price: $2,989,000
Days on market: 111
Size: 5 bedrooms, 7 bathrooms, 8,308 square feet
Listing agent: Owen Price, Sales Representative, Keller William Lifestyle Realty
Disclaimer: London Inc. does not guarantee the accuracy of the statistical data on this page. The data does not represent the listings of any one agent or agency but represents the activity of the real estate community in the area. Any real estate agent’s ad appearing is separate from the statistical data provided, which is in no way a part of their advertisement.