Bank of Canada Rate Cut Sparks Housing Demand Amid Falling Toronto and Vancouver Home Sales



Discover how the Bank of Canada's rate cut is impacting the Canadian housing market, with Toronto and Vancouver home sales declining in May.

Bank of Canada's rate cut could spur housing demand as Toronto home sales fall in May

The recent decision by the Bank of Canada to lower its key interest rate by a quarter-percentage point has sparked optimism among real estate market analysts. This move, the first rate cut in over four years, brings the key interest rate down to 4.75 per cent. The decision comes at a time when many major Canadian cities, including the Greater Toronto Area, have seen a surge in home listings, with sellers outnumbering potential buyers.


Bank of Canada Rate Cut Sparks Housing Demand Amid Falling Toronto and Vancouver Home Sales

In May, new listings in the Greater Toronto Area increased by 21.1 per cent year-over-year, with 18,612 properties hitting the market. However, home sales in the same period fell by 21.7 per cent, according to the Toronto Regional Real Estate Board. TRREB president Jennifer Pearce noted that potential homebuyers were waiting for a clear signal of declining mortgage rates before making a move. The rate cut is expected to attract more buyers to the market, especially first-time buyers, and alleviate pressure in the Canada rental market.

A survey commissioned by Royal LePage revealed that a significant number of Canadian adults had postponed their property search due to the Bank of Canada's previous rate hikes. Many of these individuals indicated that they would resume their search if interest rates were to decrease. The expectation of lower borrowing costs is likely to drive more buyers into the market, leading to an increase in Canada real estate prices.

In the Greater Toronto Area, the average selling price of a home dropped by 2.5 per cent year-over-year to $1,165,691 in May. Sales figures also declined, with 2,701 properties sold in the City of Toronto and 4,312 in the rest of the GTA. All property types experienced a decrease in sales compared to the previous year, with townhouses and condos being the most affected.

While the rate cut is expected to stimulate housing demand, experts caution that the market rebound will be gradual. Prospective homebuyers are waiting for further rate cuts before re-entering the market. The Bank of Canada is likely to proceed cautiously with future rate adjustments to prevent inflationary pressures and overheating in the housing market.

Overall, the rate cut is good news for homeowners with variable-rate mortgages, as it will lead to lower monthly payments. The easing of borrowing costs is expected to benefit both buyers and sellers in the Canada real estate market.

Vancouver home sales fall nearly 20 per cent in May as inventory continues to climb

In Greater Vancouver, the real estate market saw a decline in home sales in May, with a 19.9 per cent drop compared to the previous year. The number of homes sold in the region totaled 2,733, down from 3,411 sales in May 2023. This decrease in sales comes as the inventory of homes for sale continues to rise, with 13,600 properties listed in Metro Vancouver, a 46.3 per cent increase year-over-year.

Despite the increase in inventory, the composite benchmark home price in Greater Vancouver rose by 2.3 per cent from the previous year to $1,212,000. The market saw a 12.6 per cent increase in newly available properties in May, with a total of 6,374 detached, attached, and apartment properties listed.

Experts attribute the softer-than-usual May sales to various factors, including higher borrowing costs, economic uncertainties, and government policies. The real estate market in Greater Vancouver remains dynamic, with both buyers and sellers closely monitoring market conditions.

The housing market in Canada is experiencing shifts in response to changing economic conditions and government interventions. The recent rate cut by the Bank of Canada is expected to stimulate housing demand and provide relief to both buyers and sellers in the market.

Bank of Canada Rate Cut Sparks Housing Demand Amid Falling Toronto and Vancouver Home Sales

Support Ogusyis by making a contribution – no matter how small.


Enter your amount
£
Enter your amount
£
Enter your amount
£
Yourname
Email
Phone


US Real Estate Investors Still Focused on Portugal: A Safe Haven for Property Acquisition?

Discover why the US real estate investors are turning to Portugal as a secure and appealing destination for real estate investments.

Discover why the US real estate investors are turning to Portugal as a secure and appealing destination for real estate investments.

Read more

UK House Prices Still Unaffordable for Many Despite Rising Wages

High mortgage rates and soaring bills make UK house prices unattainable for many, despite wage increases above inflation.

High mortgage rates and soaring bills make UK house prices unattainable for many, despite wage increases above inflation.

Read more

Belgium's Real Estate Prices Surge, Straining Purchasing Power

Discover how rising real estate prices in Belgium are impacting purchasing power, as interest rates remain stagnant. Stay informed.

Discover how rising real estate prices in Belgium are impacting purchasing power, as interest rates remain stagnant. Stay informed.

Read more

Dutch Housing Market: 540 Tenants Challenge Rent Increase by CBRE and Nationale-Nederlanden

In a groundbreaking move, Dutch tenants take legal action to stop rent hikes, following recent court rulings against institutional investors. Stay updated with the latest developments.

In a groundbreaking move, Dutch tenants take legal action to stop rent hikes, following recent court rulings against institutional investors. Stay updated with the latest developments.

Read more

House Prices in Ireland Surge Amid Severe Property Shortage

Discover the latest Daft.ie House Price Report revealing a 3.8% increase in Q2 2024, with prices soaring by 35% since Covid-19.

Discover the latest Daft.ie House Price Report revealing a 3.8% increase in Q2 2024, with prices soaring by 35% since Covid-19.

Read more

UK Tax Rules on Second Homes: Can They Solve the Housing Crisis?

Owners of empty properties in England, Wales, and Scotland may face higher council tax rates, but experts are unsure if this will truly address the housing shortage.

Owners of empty properties in England, Wales, and Scotland may face higher council tax rates, but experts are unsure if this will truly address the housing shortage.

Read more

Portugal Real Estate Market: Sales Decline, Prices Up 7%

Stay up to date with the latest trends in Portugal real estate market with the today update on housing prices, showing a significant 7% increase since the beginning of the year. Explore the impact of decelerating prices on the market.

Stay up to date with the latest trends in Portugal real estate market with the today update on housing prices, showing a significant 7% increase since the beginning of the year. Explore the impact of decelerating prices on the market.

Read more

The US Housing Market Stuck: Sales Slow Despite Lower Interest Rates

Despite dropping mortgage rates, the US housing market remains stagnant with no immediate signs of improvement. Experts predict recovery may not happen until 2026.

Despite dropping mortgage rates, the US housing market remains stagnant with no immediate signs of improvement. Experts predict recovery may not happen until 2026.

Read more

Idealista, Leading Spanish Real Estate Portal, Acquired by British Fund Cinven

Discover the €2.9 billion acquisition of Idealista, the top real estate site in Spain, Italy, and Portugal, by British fund Cinven.

Discover the €2.9 billion acquisition of Idealista, the top real estate site in Spain, Italy, and Portugal, by British fund Cinven.

Read more

Copyright © Ogusyis. All rights reserved. The Content may not be copied, distributed,  republished, uploaded, posted or transmitted in any way without the prior written consent of Ogusyis.