Image by: unsplash

Real estate experts are closely monitoring the aftermath of the Bank of Canada's decision to maintain its policy rate at five percent, marking the sixth consecutive meeting without a change. Victor Tran, a prominent figure in mortgage and real estate analysis, observes that while some potential homebuyers are waiting for anticipated rate cuts before entering the market, demand remains robust for select properties. Tran notes a prevailing "holding pattern" in the housing market characterized by limited supply and intense competition for desirable homes. However, there's a divide among consumers: some are willing to accept current higher interest rates to secure properties now, while others grow skeptical about the likelihood and pace of rate decreases, leading them to pause their search.

The decision to hold rates was widely anticipated by economists, who now await further evidence to support impending rate cuts. Leah Zlatkin, an expert in mortgage brokerage, views the rate hold as potentially bolstering buyer confidence, particularly in markets like the Greater Toronto Area (GTA), where housing inventory remains low and prices continue to rise due to heightened competition. John Lusink, president of Right at Home Realty, echoes this sentiment, noting sustained demand in certain Toronto neighborhoods, particularly in the detached homes sector within the 905 area code, driven partly by affordability concerns.

Despite ongoing demand in key markets, a significant portion of potential buyers remain on the sidelines, citing elevated interest rates as a deterrent. A Royal LePage survey indicates that a majority of respondents have paused their purchasing plans due to current rate levels, though many express intentions to re-enter the market once rates decrease. James Laird, co-CEO of Ratehub.ca, emphasizes the importance of monitoring fixed and variable rates in the current climate, suggesting that a narrowing gap could signal an opportune moment to consider variable rates. However, until the Bank of Canada implements rate cuts, those with variable rates or home equity lines of credit (HELOC) are advised to exercise patience.

Read the full article on: BNN Bloomberg