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Real Estate Canada Reacts to Bank of Canada’s ‘wait and watch’ Approach

Real Estate Canada has been affected by fluctuating rates over the last year, leading to changes in both sales and prices.

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Real Estate Canada Reacts to Bank of Canadas wait and watch Approach

In March 2023, the Bank of Canada maintained its overnight rate target at 4.5%, which was in line with its earlier indications. The Bank emphasized its intention to keep the interest rate steady if economic conditions evolve, as projected in the most recent Monetary Policy Report. Real Estate Canada has been affected by fluctuating rates over the last year, leading to changes in both sales and prices.

Over the past year, the Bank of Canada raised its policy rate significantly, from 0.25% in March 2022 to 4.5% presently. This led to increased prime rates and variable and adjustable mortgage rates. The decision to raise interest rates was driven by high inflation, which peaked at 8.1% in June 2022, prompting one of the most forceful interest rate hikes in Canadian history. However, inflation has since moderated.

Economists had anticipated that the central bank would maintain its current interest rate level, given that it was too soon for another hike. Recent data showed that Canada’s inflation rate decreased to 5.9% in January, and the country’s economy experienced no growth in the fourth quarter. The Bank of Canada acknowledged that although the labor market remained tight, it expected it to loosen and wage growth to stabilize.

The Bank of Canada foresees Canada’s annual inflation rate decreasing to around 3% by mid-2023, mainly due to the effects of the base year. Canada’s inflation rate is expected to continue decreasing throughout the year, barring any unforeseen circumstances. The Bank noted that global economic developments generally aligned with its forecasts but warned that China’s economic recovery and the ongoing conflict in Ukraine posed “upside risks” that could result in higher inflation.

Like other sectors, the real estate market in Canada has also been impacted by changes in interest rates, with sales and prices responding to fluctuations in borrowing costs. In 2022, the Bank of Canada began raising interest rates, leading to a slowdown in home sales and a decline in prices in many markets.

Real Estate Canada Reacts to Bank of Canadas wait and watch Approach

Canada’s largest real estate board, the Toronto Regional Real Estate Board (TRREB), serves almost 70,000 licensed real estate Brokers and Salespersons in and about the Greater Toronto Area.

In its March 3rd newsletter, TRREB’s President Paul Baron said, “It has been almost a year since the Bank of Canada started raising interest rates. Home prices have dropped over the last year from the record peak in February 2022, mitigating the impact of higher borrowing costs. Many homebuyers have also decided to purchase a lower-priced home to help offset higher borrowing costs. The share of home purchases below one million dollars is up substantially compared to this time last year.”

Across the country, home prices have decreased over the last year, attributed to various factors such as changes in demand, supply, and economic conditions. However, it’s worth noting that lower-priced homes may also be more affordable and accessible to first-time homebuyers

The decline in home sales may be temporary, as there is evidence suggesting that buying has increased for 2023. However, this increased demand may face a challenge due to a constrained supply of home listings, leading to increased competition between buyers and price growth. This is especially true in real estate properties sought by first-time buyers who are facing increased rental costs.

Overall, these trends indicate a shift in the Canadian housing market and could present opportunities for first-time homebuyers to enter the market or for current homeowners to upgrade to larger or more expensive properties. However, it’s important to remember that the housing market can be influenced by many unpredictable factors, so it’s always a good idea to consult with a real estate professional for advice and guidance.

By Hema Chandrashekar

Sr. Content Editor, Save Max

We are an Instructor, Modern Full Stack Web Application Developers, Freelancers, Tech Bloggers, and Technical SEO Experts. We deliver a rich set of software applications for your business needs.

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Lifestyle

How Can You Heat Your House More Efficiently?

So what steps can you take to heat your house more efficiently? Get peripheral or secondary sources of heat. Invest in a smart thermostat.

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How Can You Heat Your House More Efficiently

When fall and winter finally roll around, homeowners everywhere start thinking about heating and the state of their utility bills. Nobody wants to shiver in the cold during winter, but at the same time, they also don’t want to pay exorbitantly high electricity or natural gas bills.

So what steps can you take to heat your house more efficiently?

1. Get Peripheral/Secondary Sources of Heat

First, consider getting peripheral and secondary sources of heat. This is especially important if you have a large house. Your central heating unit should be capable of providing adequate heat to your entire home, and somewhat efficiently, but this might be a waste of energy if you’re not using your entire home.

For example, with a propane heater, a fireplace, or an electric space heater, you’ll be able to heat individual rooms, like a living room, bedroom, or office, without necessarily having to heat the entire interior of your house. This can dramatically reduce your energy consumption, while simultaneously allowing you to stay warmer in the rooms that matter most.

Even if you decide to heat your entire house to a certain point, you can concentrate extra warmth into the places that truly need it this way.

2. Invest in a Smart Thermostat

You should also consider investing in a smart thermostat. This marvelous piece of technology allows you to remotely control the temperature of your house and even set an automatic schedule for how your house is heated. This way, you can automatically turn down the heat when you go to work, turn the heater on when you’re away, and have the house come up to temperature just as you arrive. With tighter controls, you can make sure the house is warm enough to stay comfortable whenever you’re home while reducing your total energy expenditures.

Additionally, many smart thermostats have built-in features to allow you to monitor and observe your own heating activity. If you notice any aberrant patterns or if you’re using more energy than you expected, you can investigate and make corrections.

3. Upgrade Your Insulation

If your insulation is subpar, the efficiency of your heating is going to plummet. Homes lose heat in a variety of ways, including through the walls. The job of insulation is to create a thick barrier that prevents heat from being lost too rapidly. Nobody likes the idea of tearing down all their walls and re-insulating, but you may not have to do this. Instead, you can use blown insulation to greatly increase the insulative potential of your home without having to spend a lot of time or money on the project.

If you’re not sure about the quality of your insulation, hold your hand to a few different walls during a cold winter day. Do any of them feel frightfully cold? This is usually an indication of poor insulation.

Tips for Heating Your Home More Efficiently

4. Replace Old Windows

Another heating efficiency problem many people face is old windows. If your windows are decades old, they probably aren’t sealed properly anymore, they’re probably single-paned, and they’re probably a major source of heat loss. Upgrading your windows is a significant expenditure, but it’s a home improvement project that comes with a considerably high return on investment (ROI).

After upgrading your windows, you should see much lower energy bills and you’ll actively increase the value of your house. There are also some added bonuses, such as making your windows much easier to open and shut.

5. Take Care of Your Furnace

Take good care of your furnace so it continues operating efficiently. At minimum, you should swap out your air filter at least twice a year, and more frequently in some cases. You should also have your furnace inspected and cleaned out on an annual basis. If your furnace no longer runs efficiently, or if you suspect a problem with it, hire a professional to make repairs or replace the unit entirely.

6. Find and Seal Drafts

Any crack or hole in your house, even a tiny one, could increase your utility bills by causing inordinate heat loss. Accordingly, you should spend some time finding and sealing those drafts. These are especially common in windows and doors.

7. Reverse Your Ceiling Fans

Many people don’t understand this, but ceiling fan directions can be reversed. If you reverse your ceiling fans, you’ll redistribute air throughout your house, ultimately allowing it to be heated more efficiently. It’s counterintuitive to turn your ceiling fans on during the winter, but as long as the direction is reversed, you’ll actively benefit from it.

If your heating bills are higher than you’d like even after making all these changes, you can consider dressing in more layers and knocking down the temperature a few degrees. But for the most part, these strategies should allow you to stay nice and toasty during even the coldest winters without breaking the bank.

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