TORONTO — While the Bank of Canada’s fourth straight cut to its key interest rate could inspire potential homebuyers to get off the sidelines, some commentators say the housing market may not see a huge spark just yet.
The central bank brought its key policy rate down by half a percentage point to 3.75 per cent on Wednesday after Canada’s inflation rate fell to 1.6 per cent in September.
Ratesdotca mortgage and real estate expert Victor Tran says many would-be buyers will likely wait for the Bank of Canada’s final rate announcement of the year in December before making a move because they are worried the market hasn’t yet bottomed out.
While Tran says it is difficult to accurately time the market, he predicts it’s likely to heat up quickly once it does begin to move, pushing home prices higher and leading to an unseasonably busy winter season.
Earlier this month, the Canadian Real Estate Association downgraded its housing market forecast for the remainder of the year, saying the Bank of Canada’s interest rate cuts haven’t spurred the gradual improvement it previously anticipated.
CREA said the accelerated pace of interest rate cuts could actually prompt some buyers to hold off on a purchase for now, keeping the national housing market in “more of a holding pattern” until next spring.
This report by The Canadian Press was first published Oct. 23, 2024.
Sammy Hudes, The Canadian Press