While experts say the Bank of Canada’s previous two rate cuts did little to stimulate the housing market, opinions differ on whether the latest cut will increase activity.
Phil Soper, president and CEO, Royal LePage, joins BNN Bloomberg and talks about the impact of rate cuts on the housing market.
“Mortgage rates have not come down nearly fast enough to stimulate much activity in the housing market. It’s just not affordable for people.” However, she noted that the previous two rate cuts in June and July did “very little to move the dial on real estate demand” and said potential buyers were waiting for mortgage rates to decrease further.
“Once the backlog of sidelined buyers is released into the market, pent-up demand will drive prices higher. This fall, we can expect more cautious Canadians to take the plunge, while those willing to take on the risk might hold out for further rate cuts,” Soper said.Adam Jacobs, the head of research at Colliers Canada, said in a statement to BNNBloomberg.ca Wednesday that the Bank of Canada’s move to lower borrowing costs was widely anticipated by economists and forecasters.
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