It’s safe to say that this year has offered its fair share of unexpected events and challenges for BC residents - and many others around the world! What may come as somewhat of a surprise during these trying times is that this global pandemic merely postponed the rapid-paced real estate market we typically see in the Comox Valley within the spring, rather than collapsing the market as one may have predicted. In fact, the volume of activity that usually occurs during the March to May monthly spread, simply shifted into the summer months and has continued into the fall season as well.
This brings up the question of how? How was BC able to keep trending forward on a positive note within the real estate market, and how have Courtenay residents been able to remain at an opportunity to invest in real estate? The answer may come down to these two key factors, which are explored below.
The Bank of Canada
Upon reflection, we avoided being impacted at a higher level because the Bank of Canada (and its global counterparts) learned something from the major credit crisis that occurred during the “flash crash” back in 2010. The banks acted quickly at the onset of COVID-19 and managed this situation with much more experience from the circumstances that unfolded a decade prior. Many variable rate mortgages saw a reduction in monthly payments, while new homebuyers were able to capture and lock in incredibly low interest rate offerings.
So, what does this look like in terms of numbers for moving forward? Well, as noted in the Mortgage Rate Forecast report released by the British Columbia Real Estate Association (BCREA), the Bank of Canada has confirmed it has no plans to raise its overnight policy rate from 0.25% until slack in the economy is absorbed and inflation returns to its more sustainable 2% target. With this in mind, the average Canadian 5-year fixed interest rate offering currently sits below 2%.
In addition, while overall projections are difficult to make with the unpredictability of the short and long terms affects COVID-19 may have on the economy, the good news for people wanting to get into the real estate market is that the simulated scenarios BCREA has run project that the earliest the Bank of Canada may begin raising interest rates would most likely be 2023.
Many government assistance programs also aided in maintaining strength within the economy, especially as we navigated the early effects of COVID-19. Many Canadians were able to pay their mortgage and maintain their homeownership responsibilities during the spring and summer months because of the introduction of financial support for both individuals and businesses. These assistance programs and the potential to defer mortgage payments helped to keep homes out of foreclosure. What has remained important is that we continue to invest locally in our favourite businesses and service providers. Head over to The Government of Canada's Emergency Response Portal for ongoing programs.
To put a neat little bow on everything for you, here’s the message: Now may be the time to take advantage of some of the lowest mortgage rates BC has ever offered – and to potentially maximize the relatively modest increase in average housing prices in comparison to some of Canada’s other key markets. Each person’s situation is so different, so let’s connect today and I can share more about how this unique market we’re experiencing here in the Comox Valley can help you build future wealth for you and your family.