“The interest-rate fog is starting to kind of ease, but it doesn’t mean that the pain is not there,” he said. “The fact that interest rates will not be rising from this point does not mean that the pain will not be there because it’s working with a lag.”
Indeed, Canada’s chronic lack of housing supply, a crisis which to date has shown little sign of abating, means that conditions are likely to remain tight for much of the first half of the year, he suggested.
“I think that the housing market will continue to be under pressure over the next few months. We have to remember that this is the first correction ever that supply, namely listings, did not fall,” he said.
“I suggest that will change in 2023 with the market more balanced. We will see more sellers willing to list, we will see some distressed sellers into the market, and that will put downward pressure on prices that were protected by the lack of listings.”
What are your thoughts on the Bank of Canada’s announcement and what it could mean for Canada’s housing and mortgage markets? Let us know in the comments section below.