Sellers hold on to price expectations as FOOP rears its head

After a year of frenzied price increases when the fear of missing out, or FOMO, prevailed, a credit squeeze and rising interest rates are now driving the market in the opposite direction. Some economists predict prices will sink as much as 10% this year. 

While prices are holding despite the change in market dynamics, there is now FOOP amongst buyers, some of whom will be under additional pressure from legislative and fiscal changes impacting their ability to borrow, says Jen Baird, REINZ chief executive.

“As a shift in sentiment sets in and buyers are less willing, or unable, to pay the prices we saw towards the end of 2021, pressure will come on vendors to adjust their expectations to meet the market.

“Tighter lending criteria are affecting buyers and, with international borders open, some younger people are re-evaluating their financial goals,” says Baird.