Hello Everyone,

                                    The Bank of Canada raised its key interest rate again yesterday to 4.75 which is the highest that it has been since 2001. This comes after pausing it since January. The reason they do this is to try to curb inflation. However, after a sharp decrease in home prices the latter half of last year, home prices have been increasing since January.

We have seen this in the Kingston Market also as bidding wars have become a thing again for a segment of the market. However, no where near the craziness of the last two years. Often the winning bid still may have a condition or two.

This isn’t what the central banks wanted to see. Buyers assumed rate hikes were done and jumped back into the market.

This may add a little bit of uncertainty to the market, but I don’t see it having a huge impact on Residential sales right now as it is pretty busy and I think that the Buyers who are out there looking right now will continue searching and try to buy the home which they have saved up for now.

If I were thinking of selling, I would try to list sooner then later as the market always dies come July-August since people want to move before the school year. The next rate announcement is July 12 also. So certainly, you want to list before then.

This rate hike will certainly hurt Rental Properties and Commercial Units. Banks use the current rents to finance deals and the higher interest rates will make it difficult for Buyers to find positive cashflow deals unless Investment Property owners come down from there high prices.

I recently negotiated for a month on a multiunit property where we offered the seller $5,000,000 and they wouldn’t accept our offer because they wanted $120,000 more, even though the property has been listed a long time and we were just breaking even on the cashflow at that valuation.

I am seeing a lot of commercial and investment properties listed for millions of dollars more then the numbers will support for financing. These sellers will need to get realistic about their prices if they want to sell.

If you plan on buying or selling this year and want to have a chat with me about how you should proceed in this market send me an email at jasonremaxrise@gmail.com or give me a call at 613-888-6567.