So you are thinking of either buying a home, maybe selling your home, or you're just worried about what is happening with the mortgage rates in Canada. The rates are going up. They're going up at a very fast pace. And you you're a little unsure what to do if you've been following the news. You know that this morning the bank of Canada just raised its overnight rate by half a percent, one of the bigger increases that the bank of Canada has done in the long, long history of the bank.
So what's going on and what is this going to do to impact the market? Is this rate increase a big deal? Is it going to crash the market in Surrey, BC, and surrounding areas? What's going to happen to real estate values and what should you do? Well, let's jump into that.
On today's video, what's good, everybody? It's Darin Germyn from the Germyn Group, where we know you've only got one chance to either buy or sell your next home. So we're here to help you get it right.
All right. So getting into it, the bank of Canada raised its overnight rate this morning from 0.5% up a 0.5% to a total of 1%. This is a pretty significant deal because it's one of the larger rate increases the bank of Canada typically would employ. And I think for most of you watching, if you follow the channel, you know this is largely being done to help not only tame the housing market, but more so tame inflation because, let's face it, everything is crazy expensive right now. You've likely heard a ton of chatter about what is going to happen with mortgage rates, what it's going to do to the market. There's probably been a lot of clickbait out there, whether it is the major news and media outlets trying to get your attention or even here on YouTube. So today I wanted to give you some great information about what likely is going to happen and what will happen with the British Columbia or BC lower mainland real estate market due to the impending rate hikes.
I think it's important to recognize as well that this isn't the last time we are going to see this. As an example, the bank of Nova Scotia predicts that the bank of Canada will probably be up at least another 1% before the end of 2022. So there's certainly more to come. It's not a one and done type thing where they've made a big move today and it's going to fix all the problems going on. So there's definitely going to be more.
But today's is all about helping you understand how impactful these rate hikes are likely going to be and what's going to result from them. Your biggest question might be is the market going to suffer and things are going to change. One thing I think is really important to recognize is we've been living in a very unhealthy market with unhealthy conditions for about the last two years where these sellers had so much leverage and so much favor in the marketplace that the price is absolutely skyrocketed. That is changing. We brought you a great video back in February letting you know that the market was beginning to peak and we've seen conditions slowly melt like a melting ice Cube out of the favor of the seller and start to be more in the favor of a buyer.
So you home sellers are worried that you're going to lose money on your property. You home buyers are scared to buy because you're thinking that you might get a property cheaper a little bit down the road. But this video has got 6 reasons why the market probably isn't going to be overly impacted by these rate hikes and what you should maybe consider when you're making your decision. So without further Ado, let's get right into it. I think the first thing to remember is that the government controls the dial on what the mortgage rates are going to be.
They do not want to create a recession. They do not want to see house prices come down, even though that's what you hear them say on the news, because that would impact a ton of people very negatively. It's much better to introduce affordability than it is to have prices claw back so at any time they can play with that dial to alter whatever is happening in the economy based on controlling the mortgage rates. The second thing to remember is we are stress tested in Canada for our mortgages. This means when anybody since 2018 has applied for a mortgage, they had to qualify to pay payments of up to 2% more than what they were actually paying.
Don't forget, back in 2018, the mortgage rates were kind of in and around where they are now. So those people could experience much, much higher payments if the mortgage rates did go up. So everybody in Canada has been stress tested against this and can afford to pay higher rates. This means we're going to see very little mortgage default, if at all. In the Canadian housing market, the next thing to consider is we have a housing shortage.
There's lots of people that live here that want to buy homes that can't get their hands on them. As an example, for all of the G7 countries, we fall on the bottom of all those G7 countries for the amount of homes that we have available for the people that live here. And we would need to add 1.8 million new homes just to meet the average of the other G7 countries. That's a ton of homes to build, meaning there's still going to be tons and tons of demand for places because, hey guys, people need a place to live. On the coattails of that, the Canadian government is looking to introduce a ton of new foreign immigrants into our country to help keep our economy booming.
This is about 430,000 in 2022 alone, with between 430 to 450,000 in 2023. And in 2024, we've got almost 1.3 million people looking to come to Canada in the next 3 years. In addition to foreign immigration, we've also got Canadian immigration into the province of British Columbia that we have to contend with. As an example, in 2021, BC welcomed over 100,000 new residents to British Columbia, whether they were from different countries or from other areas in Canada. And this was the highest number in the last 60 years.
Look, tons of people want to live here. We're a beautiful place. And the immigration numbers and emmigration numbers are showing us exactly that. All those people need a home to live in, regardless of whether they are renters or soon to be homeowners. #5 is jumping into historical mortgage rates.
Don't forget that people still are going to be buying and selling homes and where the mortgage rates are are still well below where historical mortgage rates have been. And even in the last ten years, we're still kind of right on par for where historical mortgage rates are. The historical mortgage rates have been hovering between 3 to 4.5% over the last 10 years and money is still incredibly cheap to borrow and to get a mortgage with. And the last one to round out this list is the fact that the lower mainland in BC is completely landlocked.
What does that mean? That means if we want to add new homes, we have the option of building out like many other cities. But that is actually 100% not true. Here's the problem. We are landlocked, so we have mountains to the north, we've got mountains to the east, we've got the border to the south, and we've got the ocean to the west.
We don't have a lot of space to add more property on more land, especially because British Columbia has such an extensive area of agricultural land reserve, which is land reserved for farming purposes. This means like so other many municipalities across North America, we don't have the option of going outwards all the time. We only have the option of going upwards. That means adding more properties is going to typically come in the forms of density, adding more townhomes and more condominiums, which put detached homes and land at a premium. We are one of the most beautiful places on Earth to live with a high standard and quality of living, and lots of people are going to continue to want to come here.
So in conclusion, I think it's really important to understand that the market again was going from incredibly unhealthy and is now transitioning back to a more healthy environment. Does that mean that it's going to change the game for home buyers? Yes. Does that mean it's going to change the game for home sellers? Absolutely.
But that doesn't mean that it is going to be necessarily negative. It just means that it's different. You also want to make sure that you understand that it's the market fundamentals that rule. What is going to happen for a great video on how we predict what is going to happen with market prices, make sure you check out this video here because we go all into the #1 thing that we watch to predict market price changes. And I'll leave you with this.
People will adjust to the new reality. A lot of the news is going to try and sell to you that the sky is falling, and it's certainly not rates are just getting back to a much more normalized level because they have to. And what happens every time we see a market cycle like this is home sellers and home buyers both adjust to the new reality. So if you want to buy a home, you've got to deal with what it is. And if you want to sell a home, you've got to deal with what it is, what the current market conditions are.
So that's kind of really how it works. Speaking of selling a home, if you are here and you're thinking of putting your home on the market, make sure you keep tuned to our YouTube channel because we're going to talk about what these rate changes mean specifically for both home buyers and home sellers in one of our upcoming videos. But also be sure to grab a copy of our PDF below on 4 Ways to Increase Your Home's Value by up to 5%. This PDF is packed with information to help you be successful and absolutely maximize your home's value, especially in a changing marketplace. And if you're a home buyer and you're looking to buy your first home, we've got you covered as well, where you can download a copy of 6 ways that first time home buyers kind of screw up the first time they buy and how to avoid doing so.
This is full of really good tips, you guys. So make sure you grab your copy as well. Again, I'm Darin Germyn with the Germyn Group. We know you've only got one chance to either buy or sell your home. We're here to help you get it right. Make sure you leave any comments below. Let us know if we missed anything. Let us know your thoughts. We'd love to know more from you guys. We'd love hearing from you. And if you want to book time to speak directly with me. Make sure you check out my calendar link below. You can put something in my calendar you can fill me in on what your questions might be or what your needs are and we can see what we can do to help you.