Canada's economy experienced a modest 0.3% growth in GDP during May. However, it is projected that this growth may slow down in June, with an expected decrease of 0.2%. If this projection holds true, it would result in a 1.2% increase in the economy for Q2 of 2023, which is lower than the previous quarter's 3.4% increase and also falls short of the Bank of Canada's initial estimate of a 1.5% increase for Q2. The slowdown in economic growth has been a focal point for the Bank of Canada, and it may impact their decision on implementing another rate hike in September.

Given the recent economic performance and projections, there could be potential implications for the Fall Real Estate Market. The lower-than-expected GDP growth may affect consumer confidence and spending patterns. However, the overall impact on the real estate market will depend on various factors, including inflation rates and interest rates, which are yet to be announced.

To have a clearer picture of how the Fall Real Estate Market may be affected, it would be prudent to keep an eye on the upcoming updates on inflation (August 10th) and GDP for Canada (September 1st), as well as the rate announcement on September 6th. These key economic indicators will provide valuable insights into the direction of the economy and its potential impact on the real estate sector.

That said, the biggest factor for real estate in recent months has been interest rates. As we have seen throughout 2023 when interest rates stabilize more buyers enter the market and that puts upward pressure on pricing.

Below you can find a schedule of all Bank of Canada interest rate announcements for the remainder of 2023:

• Wednesday, September 6
• Wednesday, October 25* Monetary Policy Report Published
• Wednesday, December 6

Sources: Bank of Canada News / Summary provided by Steven J. King, Principal Broker at Verico SGH Mortgages Inc. 

Last Friday we attended the Toronto Regional Real Estate Board’s 2023 Market Outlook. Here is what we learned.

Increased immigration and higher borrowing costs are the two primary forces that will shape the 2023 Real Estate Market across the GTA.

TRREB predicts 70,000 homes will be sold in 2023. Fewer than in 2022, largely due to a slow start to the year followed by more sales in the second half of 2023.

TRREB predicts the average price (across all home types) for the year will be $1,140MM which would be higher than in the second half of 2023 yet 4% behind 2022’s overall average.

Ipsos Polls indicated that:

Buying intentions are up slightly over last year with 28% surveyed intending to make a purchase in 2023.

The number of First-Time Home Buyers intending to purchase in 2023 has increased from 39% to 46%.

Listing intentions were up over 2022 among townhome owners and similar for condo apartments and semis but detached homeowners are less likely to sell in 2023.

Increased immigration and borrowing costs will keep the rental market competitive and rent. Rental vacancies will trend lower leading to increased rents for tenants.

The INTEREST RATE OUTLOOK is positive from TRREB’s perspective predicting that if inflation eases as we move through the year that rates will flatten and point downward by year's end.

THE BOTTOM LINE

For SELLERS: While you won’t see the enormous month-over-month price gains we saw during the pandemic, a more balanced market with more buyers entering the market will be beneficial as we head into the second half of 2023.

We’re already starting to see competition pick up on certain properties due to limited supply.

For BUYERS: A more balanced market allows buyers to better set expectations and pricing is much more affordable compared to a year ago. TRREB’s outlook on interest rates also provides comfort. A balanced market provides First-Time Homebuyers more opportunities to get into the market.