Dear Clients, Neighbours and Friends,

As you know by now, on July 24 the Bank of Canada BOC lowered its interest rate again.  This time to 4.5 per cent down from 4.75 per cent.  As a result, prime rate will change to 6.70 per cent.

 However, despite two consecutive rate drops and an ongoing increase in inventory real estate activity remains dark.

 Looking back to the recent past one can understand why.

 The BOC raised interest rates 10 times between March 2022 and July 2023, the most aggressive monetary policy tightening campaign on record. Although this campaign succeeded in reducing inflation and avoiding economic recession, the fact remains, higher interest rates make it more expensive for individuals to borrow money and service their debts. 

 Most Canadians experience interest rates through mortgage and consumer debt.  The last two rate cuts have managed to spur on quick blips in activity but overall, the interest rate on both variable and fixed mortgages has risen so dramatically buyers simply can’t afford to get into the housing market or increase their monthly expenses.

 So for now. We go to the beach.

 There is however, brighter days to come.

 If inflation continues to ease, its likely we will see another rate drop at the next BOC meeting, September 4th.  And its likely prime rate will continue to drop as we move further into the final half of 2024. 

Also on board with this idea is the Canadian Mortgage and Housing Corporation.  CMHC is forecasting home prices could match the levels seen in 2022 by next year and reach new highs by 2026.  This rebound in sales and home prices across Canada will be spurred on by declining mortgage rates alongside the country’s strongest population growth since the 1950’s.

 Therefore, Although August is likely to remain firmly planted in a buyers’ market territory, as mortgage rates and economic uncertainty decrease in the second half of 2024, Colin and I are optimistic this next rate drop (September 4th) will be what’s needed to bring better balance to the market overall.

 Wondering if this fall and winter could be your time to make a move?

 We can help.  Its what we do. 

Schedule your no obligation home evaluation now.  604-583-2000