Expected Turning Point for the Real Estate Market
For the first time since July 12, 2023, the Bank of Canada has lowered its key interest rate, reducing it from 5% to 4.75%. This decision marks a long-awaited turning point for the real estate market. Although an interest rate of 4.75% remains high compared to recent years, this decrease sends a clear signal of a change in direction.
Optimism for the Canadian Real Estate Market
This signal could well bring a wave of optimism to the real estate market across Canada, particularly in Quebec, where a lack of inventory of properties for sale favors sellers. Homeowners who were waiting to see the direction of interest rates before putting their property on the market may be encouraged to start the process, anticipating better fixed and variable interest rates in the future.
Success of Monetary Policies Against Inflation
The drop in the key interest rate also indicates that the monetary policy applied by the Bank of Canada to control inflation has been effective. The Bank of Canada’s goal is to achieve a 2% inflation rate. In April 2023, the inflation rate was 4.3%. Last April (2024), the recorded inflation rate was 2.7%. Everything suggests that the economy has sufficiently contracted as a result of interest rate policies.
Benefits for Consumers and the Real Estate Market
Thus, not only will mortgage rates start to become more affordable, but consumers will also begin to breathe easier with the stabilization of food and consumer product prices. This context is favorable for the real estate market.
Caution and Real Estate Advice Recommended
However, it is important to note that we will not see significant changes in the number of houses for sale overnight. This is a new trend emerging on the horizon, and the impact will be felt over the coming months. If you are considering selling or buying a property and are wondering if now is the right time or if you are seeking advice on the best strategy to take, consult your residential real estate broker, Emmanuel Paquin or Françoise Cardyn. As experts in the field, they can provide you with invaluable advice tailored to your situation. For further information on the current real estate market and how it may affect your decisions, feel free to reach out to them at info@emmanuelpaquin.ca or francoise@emmanuelpaquin.ca, or by phone at (514) 757-6268 for Emmanuel Paquin and (514) 557-4523 for Françoise Cardyn.
