The Bank of Canada’s recent interest rate cut, aimed at stimulating economic activity, can benefit both homebuyers and sellers. For buyers, lower rates may mean reduced mortgage costs, increasing affordability and potentially expanding their buying options. Sellers, on the other hand, could see increased demand as more buyers are drawn into the market, potentially boosting home values and accelerating the sales process. According to the Royal Bank of Canada,
[H]ousing prices are likely to go up. Record-low vacancy rates, coupled with interest rate cuts, pent-up demand and recent changes in mortgage rules are expected to spur demand for housing, leading to a moderate pick-up in prices. Further, there is expected growth in resales and renovations, sparked by lower interest rates and higher home prices.
And, while continued high demand should support new construction, limitations on available land, zoning restrictions and a lack of skilled labour could slow the pace of new builds. As a result, housing demand is expected to outpace increases in supply.
Further, most economist expect the Bank of Canada to continue cutting rates at its final policy meeting in December, and further into 2025. Some of Canada’s big banks (such as RBC and National Bank) are already adjusting their own forecasts to reflect deeper rates cuts by the end of next year. You can read more about these changes here.
Overall, now is a great time to review your real estate strategy. If you’re thinking about whether to buy or sell your home, I can help you decide what’s best based on your unique situation.
If you want to read more about the Bank of Canada’s latest Monetary Policy Report, click here.