Hello everyone, Today, we're diving into some exciting news that’s probable to shake up the real estate market here in the Greater Toronto Area. The Bank of Canada has just cut interest rates by 50 basis points. But what does this mean for you as a buyer, seller, or investor? Let's break it down!"
On October 23, 2024, the Bank of Canada lowered its key interest rate to 3.75%, marking the fourth consecutive cut since June. This move is aimed at boosting economic growth and easing inflation, which recently fell to 1.6%—back in line with the central bank's target.
Impact on Buyers
So, what does this mean for homebuyers? Well, lower interest rates generally translate to reduced borrowing costs. This could be a golden opportunity for those with variable-rate mortgages, as their payments might decrease in the coming months. Plus, if you're considering a fixed-rate mortgage, keep an eye out—rates might drop further if market conditions continue to improve.
For first-time buyers, this rate cut combined with new mortgage rules—like increased price caps for insured mortgages and extended amortization periods—could make homeownership more accessible. It's a promising time to explore your options!
Impact on Sellers
Now, let's talk about sellers. With lower interest rates potentially increasing buyer demand, we might see more activity in the market. However, it's important to note that while demand may rise, the prices would need to be within reason to generate traction as the market has lot of inventory already.
If you're thinking about selling and have urgency, this could be a strategic time to list your property as more buyers enter the market looking for opportunities with this cut. If your situation allows you to wait, then 3-4 months wait for the Spring time could be well worth it, with couple of more cuts impending and busier Spring market. If you are in a move-up situation, it would be better to list it at the earliest, to make more benefit on the higher priced buy side due to the slow market.
Market Dynamics
The GTA housing market is currently experiencing a surge in new listings—up 35% from last year—which has pushed inventory levels to their highest since November 2008. This means buyers have more options and negotiating power, making it crucial for sellers to price competitively. Despite this influx, prices have seen moderate declines when you consider yearly numbers. The average home price in September was down just 1.1% from last year. This stability indicates a balanced market where both buyers and sellers can find opportunities.
In September alone, home sales in the GTA rose by 8.5% year-over-year, indicating that buyers are already beginning to take advantage of more favorable market conditions.
In summary, this rate cut is likely to stimulate more activity in the GTA real estate market. Whether you're buying or selling, staying informed and prepared is key. As always, consult with your real estate professional to navigate these changes effectively.
Wish you all the very best! Reach out to our dedicated team at Elixir with any queries you have about real estate, and we will do our best to help.
Mudit Mehta
Broker of Record
ELIXIR REAL ESTATE INC.
Off: 416-816-6001 | [email protected]
