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Three interest rate announcements, three cuts in a row. The Bank of Canada has once again announced it is cutting the key interest rate to 4.25%—news Canadian home buyers and owners will certainly welcome.
Canada’s central bank made the announcement Wednesday, Sept. 4, stating its key interest rate would decrease 25 basis points—making it the third time since June the Bank has made such a move.
Shaun Cathcart, Senior Economist with the Canadian Real Estate Association (CREA), said experts are now expecting rate cuts at every remaining Bank of Canada decision this year, with momentum carrying into next year.
“Combine that with a record amount of demand waiting in the wings, and the forecast for a rekindling of Canadian housing activity going into 2025 has just gone from a layup to a slam dunk,” Cathcart said in CREA’s Housing Market Report.
Are you prepared for what may happen next? Do you know all the ins and outs of what comes with a busy real estate market? This is why finding the right REALTOR® for you is such a crucial step in the process. Navigating the current real estate landscape is tricky in times of uncertainty, but luckily for you, your REALTOR® can help calm any concerns. Here’s how.
Canadians far and wide have shown interest in jumping back into the market. If data from CREA is any indication, don’t be surprised to see multiple offers, prices going over asking and lineups at open houses once again should all this pent-up demand continue to be released.
Remember, your REALTOR® has access to data pertaining to your local housing market and may have experience navigating hot markets in the past. They know the stakes are usually high and they know they need to act fast in a busy market. Managing showings, offers, conditions, negotiations, finances, moving companies, packing—it’s all too much! Let your REALTOR® help you!
For sellers, your REALTOR® can get information on comparable homes and see what they sold for and when, access the exclusive MLS® Home Price Index— an advanced, highly accurate way to gauge prices and trends in specific areas—and know what buyers are looking for in your region.
For buyers, your REALTOR® is there to work for you and get the best home for you. They can advise you on what to expect in your local market, from commute times and proximity to amenities, to noise levels and municipal regulations you may have never heard about.
It doesn’t matter if interest rates are at 5%, 10%, or 1%—at the end of the day, your REALTOR®’s top priority should be looking out for you and making sure you’re comfortable with whatever price you land on.
Of course, a buyer’s agent should know what their client is pre-approved for, and interest rates often affect how much home one can afford. Make sure you communicate your wants, needs and budget so your REALTOR® can properly advocate on your behalf. You can look for REALTORS® with a Certified Negotiation Expert designation or a Master Certified Negotiation Expert for those who have received extra training.
Did you know your REALTOR® can help you before you’re pre-approved? That’s right! With interest rates dropping, you may want to act fast. Consider reaching out to your REALTOR® to get a handle on how your local market is reacting to the latest news from the Bank of Canada.
Your REALTOR® can also provide you with a list of lenders they’ve worked with, not to mention offer some tips and tricks to help you solidify a better rate (like, make sure you shop around before signing!).
Before doing anything, have a look at the REALTOR.ca Affordability Calculator and Payment Calculator—both can provide you with an early look at your financial situation.
One of the biggest worries for Canadians on the move is the uncertainty of conducting a real estate transaction. There are so many variables (not just talking about interest rates here!) to think about. From land transfer taxes and lawyer fees, to dealing with complete strangers while trying to complete one of the largest financial transactions of your life—you have a lot on your plate if you’re buying or selling.
Also, the right REALTOR® for you will just get it. They won’t push you into something you’re uncertain about and can even help with market timing strategies should you want to try and make the current interest rate situation work better for you.
We’ll say it again: your REALTOR® is your personal real estate MVP. While you’re figuring out financing, they can already get to work behind the scenes. If you’re buying, this means setting up searches for you, attending open houses on your behalf, and asking around to their connections about what might be coming available—hey, with interest rates dropping, anything you can do behind the scenes to get a leg up on your competition is worthwhile.
If you’re selling, your REALTOR® can get to work marketing your property right away, getting it ready for staging and compiling documentation, all without disrupting your routines too much.
By now you know interest rates impact the Canadian real estate landscape and that likely isn’t about to change any time soon. Making the right decision at the right moment seems like a lot of pressure when you don’t know where interest rates will be on a month-to-month basis.
Thankfully REALTORS® monitor market trends and housing data to make sure, whether you’re buying or selling, your best interests are being kept top of mind.
