Green Shoots Sprout This Fall, Amid Lower Interest Rates and Prospects of More Cuts Ahead
Steady fall market anticipated in majority of regions across Canadian housing market
With the long-anticipated decline in interest rates finally starting to materialize, early indicators from RE/MAX brokers and agents across Canada suggest steady housing market activity this fall, with average sale prices across all housing types expected to increase between one and six per cent in most regions by year’s end. Ahead of the next Bank of Canada (BoC) interest rate announcement on September 4, two in 10 Canadians (16 per cent) said they will feel more comfortable engaging in the real estate market once they see there is more than a 100-basis-point cut to the BoC’s lending rate between now and the end of the year, according to a Leger survey commissioned by RE/MAX.
Consumer Sentiments Going Into the Fall Market
Ahead of further anticipated interest rate cuts by the Bank of Canada, it seems that even the mere prospect of lower rates has boosted confidence among first-time homebuyers, with one-quarter of Canadians (25 per cent) actively saving for a home purchase and confident they will be able to buy soon (with the majority being younger Millennials and Gen Zs aged 18-24, at 35 per cent).
On the flipside, dropping interest rates now may prove too little, too late for some current homeowners, with 14 per cent saying they need to renew their mortgage soon, and with the current higher interest rate, they may need to sell their home.
When it comes to financial savings, the Leger survey revealed that while a home purchase is listed among the top three priorities for 25 per cent of Canadians, it has taken a back seat to day-to-day expenses such as utilities and food (58 per cent), and travel (45 per cent).
In the search for affordability, one-quarter of Canadians say that they are considering moving to another country (28 per cent) and 25 per cent say they are reconsidering whether to have children or start a family due to housing affordability challenges.
Survey Says...
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As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices with a presence in more than 110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC and RE/MAX Ontario-Atlantic Canada, Inc., and RE/MAX Promotions, Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides.
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