INTEREST RATES ARE DOWN

The Bank of Canada announced a cut to its key interest rate to 4.25 per cent on September 4th. What does this mean? As CBC reports, “buying a house could be a lot more affordable because mortgage rates will be lower than they were a few months ago”. Two more Bank of Canada rate announcements are scheduled this year: October 23 and December 11, with economic experts predicting more interest rate cuts to come. These rate cuts can potentially enhance your buying power, however, as more buyers enter the market, property prices are expected to rise, making now the perfect time to secure your new home before costs increase.

HOME PRICES ARE RISING

Home prices are rising—a result of various factors, including the notable increase in population. The Household Formation and the Housing Stock report from the Parliamentary Budget Officer, states that “Canada’s population grew by 1.2 million people (2.9 per cent)—the highest growth rate since 1957”. More people = the need for more housing…and at a rapid pace. This leads to prices increasing due to less viable land options available, tighter timelines for things like servicing land, and rushing shipments—costs that ultimately add more dollars to a final home price. It all adds up to NOW being the perfect time to buy.

DEMAND IS HEATING UP

As the market begins to favour buyers, many people are poised to make their move on a new home. Government projections suggest “Canada needs another 1.3M homes by 2030 to solve supply and demand gap”. The reality of low supply coupled with the late July announcement from the federal government regarding “30 year mortgages for first-time buyers of new builds”, means demand is going to increase and the result could ultimately lead to higher construction costs and less options for you to choose from. Don’t wait—secure your perfect home before the demand boils over and your opportunity slips away.