With the Bank of Canada expected to announce an increase in interest rates, some prospective home-buyers are hoping it will give them an edge in B.C.’s housing market.
Joel Drolet and his family are one of many vying to buy a semi-detached four-bedroom bungalow in Saanich.
“It’s great,” Drolet said. “It’s in a great neighbourhood, and offers a lot of what we are looking for.”
Drolet and his wife are looking to upgrade their condo to a larger property for their young family, and they’re hoping an expected rise in interest rates might help them.
“I’m not expecting there to be a drop in price or anything like that,” Drolet said. “But maybe a little bit more buyer-friendly market, maybe.”
The listing agent, Vanessa Roman, says most buyers have to be ready to jump on a property with their finances in order.
“Interest rates are going up,” Roman said. “I mean, that shouldn’t be a surprise to anyone. I don’t think at the moment, I’m not seeing a lot of impact that particular issue.”
Roman expects dozens of prospective buyers at the open house for the property, and says lots of competition with few available listings is what’s fueling this explosive market.
READ MORE: Demand continues to outpace supply for property in January 2022, says Vancouver Island Real Estate Board
“What I’m seeing in my business right now is that we have a lot of buyers, and very little to sell them,” Roman said.
With only 744 active listings in January this year in Greater Victoria, any rise in interest rates may eliminate first-time buyers.
Karen Dinnie-Smith, president of the Victoria Real Estate Board, said the number one issue in Victoria is a lack of available listings.
“What we really need to do is have more inventory, where we may see with the interest rates increasing,” Dinnie-Smith said. “What we may see is our entry-level people not able to get their foot into the markets.”
University of Victoria economist Graham Voss said the Bank of Canada is signalling a change to the rock bottom interest rates.
“Fairly clearly we’re looking at rates rising over this year and into next,” Voss said.
He said the bank looks to control surging inflation as energy prices are affecting everything from groceries to clothes.
“I think measured steps over the year, three, possibly four rate rises,” Voss said. “So I think by the end of this year you should see rates go, their policy rate go up by about one per cent.”
The next opportunity for the Bank of Canada to increase the interest rate is March 2.