With the Bank of Canada recently increasing the benchmark interest rate to 1.5%, Vancouver’s housing market has begun to cool off. The city has been setting record real estate highs in the country for almost a decade. With an unpredictable future ahead, how can house buyers and sellers make better informed decisions?
Canadian tech firm HouseSigma, continues to provide those in the housing market with transparent, real numbers, forecasting interest rates using AI. If there is one thing we love as consumers, it is accessible information that can save us a few bucks (and in this case, potentially a few hundred thousand).
While higher interest rates are said to be cooling the market in B.C. and beyond, HouseSigma agent Hao Li says there is likely something else at play in these two places. As people flocked outside of the city looking for cheaper housing, the population boom drove up prices. Now, Li says the demand has eased.
"One of the reasons that it is going downward even more is because it's been rising much quicker in those two cities compared to other cities of Greater Vancouver for the past two years," he says.
We can forecast that the price and the sales volume will drop initially. But as time goes on, it will get more stabilized."
Furthermore, Li says that increasing interest rates has created a shift in consumer interests.
As Vancouver prices become (slightly) more affordable, buyers are no longer forced to endure long commutes to work, as they are able to purchase houses closer to urban centers.
In this case, HouseSigma highlights that while increasing interest rates have resulted in a drop in prices, stability will return to the market, comforting sellers.
Li does make sure to emphasize though, there is more to buying and selling a house than purely market rates.
In markets and moments like this one, Li says, negotiation becomes something both buyers and sellers begin to focus on.
In knowing the market’s potential, buyers and sellers can enter into negotiations more confident in their decisions.
Consumer comfort should never be secondary when it comes to buying a house. While 2022 might be a period of economic uncertainty, the one thing we can know for sure is that AI is taking over real estate.
Algorithms enhance efficiency and increase access to information for buyers and sellers. Property values, debt levels and even a homeowner's personal information are all valuable pieces of information that AI can help source and decode.
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