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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.




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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Real Estate

Wage costs in civil construction in developed countries

In this article, we will discuss more about how the construction industry works in these wealthier countries and explore the myths and truths behind the contracts of workers.




Wage costs in civil construction in developed countries

How is the demand for labor in places considered first-world?

Developed countries are constantly used as examples of good workplaces, service provision, and access to basic rights. This is because these countries have strong economies, which provide good functionality for their systems. The list of first-world countries includes Canada, the United States, Japan, Australia, and the Nordic countries of Norway, Sweden, Denmark, Finland, and Iceland.

In addition to having functional systems, these countries have great access to technology. Some of them are even considered references in technology products, such as Japan and the United States. While Japan excels in creating machines, the USA is responsible for the biggest technology companies in the world, such as Apple. This influence in the technology market extends to other areas of these countries, including construction, which has one of the best construction industry solutions in the world.

In this article, we will discuss more about how the construction industry works in these wealthier countries and explore the myths and truths behind the contracts of workers who often come from different parts of the world in search of better working conditions in these countries.

1. Foreign workers

A large percentage of the workforce in the construction sector consists of workers who come from different backgrounds than the countries they want to work in. This is because this sector requires a lot of physical work, and many natives refuse these types of jobs, so foreigners end up working in this area.

Having a job registered by the contracting company is a significant positive factor that helps guarantee a stay visa in the country. This strategy is often used by Latin Americans traveling to the United States and Canada. Other examples include African natives who travel to European countries to work in the construction sector.

Wage costs in civil construction in developed countries

Even if workers are foreigners, labor rules and rights must be applied, as there can be no discrimination among employees. To ensure rights such as retirement and salary benefits in case of accidents, it is necessary for the employee to be duly registered by the company, or the company may face high fines.

2. Construction excellence

These developed countries are considered references in construction. Japan can be used as the best example of this, as a country that has already suffered from natural disasters such as tsunamis and earthquakes but has never had problems rebuilding its roads, buildings, and houses after these tragedies. Japan is an example of excellence and work within and outside Asian concepts.

Nordic countries are also examples of construction excellence, as most construction projects are carried out in extreme climates. These countries are known for their low temperatures and for experiencing some of the worst snowstorms on the planet. However, even the hostile climate does not prevent the construction of buildings and roads.

3. Technology and Construction

Construction projects are carried out in short periods of time or even under low temperatures because there is an operating system that facilitates the work. Many engineers and architects in developed countries are experts in technology, allowing them to manage software and machines that not only reduce the chances of risk in construction but also aim for good performance.

For example, in countries where earthquake risks are high, such as Japan, construction professionals need to develop projects that reduce the impacts of possible earthquakes. This is only possible with the use of technology, which helps professionals analyze the soil. The state of the soil is crucial for engineers to make the best choices for materials. This is how these countries remain great references in the field of construction.

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