Two mortgage rate cuts of 0.5% in succession have given Canadians renewed optimism about the property market.
The national average sale price has risen 7.4% to $694,411, according to new figures from the Canadians Real Estate Association (CREA).
And with our cash rate now 3.25% – one of the lowest among developed economies – homebuyers have responded with a surge of transactions.
CREA has reported a 26% rise in the number of properties sold last November compared with the corresponding period 12 months before.
It’s the second successive month of year-on-year growth in property deals, according to the CREA. The October data showed a 30% increase in sales.
Ramped up activity in Toronto, Montreal, Vancouver and Calgary helped push total transactions to 37,855. In November 2023, Canada registered 30,042 deals.
Alberta and Ontario also reported strong transaction levels.
CREA said in a statement: “Normally we might expect this market rebound to take a pause before resuming in the spring. However, the Bank of Canada’s latest 50-basis point cut together with a loosening of mortgage rules could mean a more active winter market than normal.”
The Bank of Canada – our central bank – has reduced the domestic cash rate five times in succession. It now stands at 3.25%, down from the 5.25% we experienced from July 2023 until last June.
Property experts say a central bank must reduce rates by a minimum of 1% to have an impact on the market – and the Bank of Canada has done twice that minimum.
Listings are also up, registering a 8.9% jump compared with last November. More than 160,000 properties were for sale, although this is still below historical averages.
As an experienced agency, we believe smart buyers are entering the market as soon as possible. The reason? The lower interest rates are likely to heat up the market, just as they did during Covid when the cash rate fell to 0.5%.
The market mood can turn in a dime, and we believe we’re seeing that right now. Whether you’re a first homebuyer, upgrader or investor, this could be your moment to act.