Buyers Might Not Return to the Market Despite Fourth Consecutive Interest Rate Cut
Despite the Bank of Canada’s recent rate cut, experts suggest that the housing market may not experience a significant boost just yet.
The central bank reduced its key policy rate by half a percentage point to 3.75 percent in response to Canada’s inflation rate dropping to 1.6 percent in September.
Victor Tran, a mortgage and real estate expert at Ratesdotca, anticipates that many potential homebuyers will delay their purchases until the Bank of Canada’s final rate announcement in December to ensure the market has stabilized.
While predicting the market timing is challenging, Tran expects a rapid acceleration in activity once it starts moving, which could drive up home prices and lead to an unusually busy winter season.
Earlier this month, the Canadian Real Estate Association revised its housing market forecast for the year, stating that the Bank of Canada’s rate cuts have not sparked the gradual improvement they had anticipated.
CREA mentioned that the quicker pace of rate cuts might actually discourage some buyers from making purchases, keeping the national housing market relatively stagnant until next spring.