Will recent rate cut increase likelihood of early spring market?

“This latest significant rate cut will help to sustain activity throughout the winter months, typically the slowest period for real estate transactions in Canada,” said Phil Soper, president and CEO of Royal LePage. “Buyers have woken up to the reality that property prices are rising again, and more will feel an urgency to act before affordability erodes. As a result, we are anticipating a ‘pull-ahead’ of activity and an early start to the traditional spring housing market. Adding to this momentum is the change in lending policies that come into effect on December 15th, which we believe will coax more sidelined purchasers to take advantage of their expanded borrowing power.” Many sidelined homebuyers have been waiting for rates to drop significantly before reentering the market. With another cut now in the books, many may feel that interest rates have dropped enough for them to revisit their home purchase plans. According to a Royal LePage survey, conducted by Leger, 51% of Canadians who put their home buying plans on hold the last two years said they would return to the market when the Bank of Canada reduced its key lending rate. Eighteen percent said they would wait for a cut of 50 to 100 basis points, and 23% said they’d need to see a cut of more than 100 basis points before considering resuming their search.The Bank of Canada will make its next interest rate announcement on Wednesday, January 29th, 2025. Read the full December 11th report here.