Bank of Canada Interest Cuts and Expert Views on Canadian Real Estate Market

How is real estate market after the latest interest cut by the bank of Canada? What do real estate experts say about the interest cut and its aftermath? We find mixed feelings when we listen to those experts in the field. According to The Globe and Mail article, Royal LePage president predicts 'real lift’ in home sales after Bank of Canada cut the interest rate. However, John Pasalis, one of the real estate practitioner and researcher does not think so. He does not think so since there will be any sales increase until next year because right now the interest rate is very high. On the other hand, John Flynn, another real estate practitioner and researcher says that nothing is going to happen after the interest rate cut as whatever had to happen has already happened before the rate cut. Yes, there is a gradual improvement for freeholds right now. It does not mean that the price will drastically go up after the rate cut for the freehold. Condo market is down right now. The sellers of the vacant condo rush to sale and you may get for even low price. And, the buyers are reluctant to buy the rented condo for various reasons. Stay informed and use your rational before you rush to invest in real estate after listening to people.

Easing of Inflation and Canadian Housing Market

“If inflation continues to ease, and our confidence that inflation is headed sustainably to the 2-per-cent target continues to increase, it is reasonable to expect further cuts to our policy interest rate. But we are taking our interest rate decisions one meeting at a time.” Mr. Macklem said. The Bank of Canada is the first G7 central bank to start easing monetary policy. The European Central Bank is expected to follow suit on Thursday, while the U.S. Federal Reserve, which is dealing with a stronger economy and more stubborn inflation, is expected to hold off rate cuts until later in the year. 

The next meeting is on July 24, six weeks from now. This interest rate cut is like “finally, the interest rate is not going to increase.” Nothing more than that.  Looks like this rate cut is not going to bring any momentum in a near future. Since the current inventory dictates price of a house for at least 90 days, there is more than enough inventory in the GTA housing market. Based on the current listing, free hold market may go up whereas condo market will stay same or go down until the current inventory is cleared up since there is too much inventory in the condo market.

It is a right time to invest on the real estate?

if you are thinking about investing on a property, do not waste time by thinking whether it is a right time to do so. There is never a bad time for the investment on real estate. You may feel that the market is very hot now and you think that you will buy your desired property when the market cools down. It is a serious mistake and you will regret it later. Act now! Do not wait.

About Buying and Selling Homes in Ontario

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