Canada’s GDP is seeing halting progress and a trade war will likely only exacerbate it, so this result was not unexpected. It is also likely that the Bank of Canada weighed the ongoing tariff battle as a factor in its decision, as rising costs for material could push home prices up as well as further stall economic growth.
How this cut could affect the housing market.
Given the larger than normal inventory of available homes on the market in Greater Vancouver recently and the fact that many areas are buyer’s markets right now, it could be an opportune time to buy. But these rate cuts are also a double-edged sword, in the sense that this brief opportunity may also lead to many buyers jumping into the market and flipping the tables yet again into a seller’s market. As Erin Best explored in her article about the potential impacts of tariffs on the housing market, acting fast is your best bet to taking advantage of interest rate cuts.
According to REW One Member agent Ty Corsie, “We are seeing a massive amount of inventory. Way more inventory than what buyers are out there – record numbers of inventory, like three times what we normally have. I don't think the BoC announcement will catch up to the amount of inventory. I just think there's too much coming on.”
What Homeseekers can do now – and later.
Looking ahead, some forecasters are predicting further rate cuts throughout 2025. That remains to be seen, as it depends on the performance of the Canadian economy and eventual fallout of trade battles. If you already have a variable rate mortgage, work with your financial advisor or a mortgage broker to determine the impact the recent Bank of Canada rate cut will have on your mortgage. And if you’re looking to renew your mortgage, you can begin the process 120 days before your renewal date.
As for the future of the market, Corsie thinks that, “we're going to see some big softening in the real estate market. I think we're going to see prices soften over the next six months. There's just not as many buyers as there are sellers. There's three times the inventory; even if the rate comes down, I don't think it'll outpace listings.”
For now, the best approach for most Homeseekers is to ask an experienced mortgage broker what your next steps should be. And if you do determine that the time is right to buy a home, getting in touch with a real estate agent should be part of your plan.
How US tariffs could shake up BC real estate.
The threat of a tariff war with the US is looming over the BC real estate industry. But what exactly could happen? Erin Best unpacks what might be in store if a trade battle erupts.
