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


Dutch Home Prices to Rise 14% by End 2026; De Nederlandsche Bank Predicts No Recession

De Nederlandsche Bank forecasts a 6% increase in Dutch home prices this year, with a steady 4% rise in the next two years. No more fear of recession for the Dutch economy.

De Nederlandsche Bank forecasts a 6% increase in Dutch home prices this year, with a steady 4% rise in the next two years. No more fear of recession for the Dutch economy.

Read more

Discover Why Costa Blanca Still a Top Choice for Foreign House Buyers in Spain

Discover why ALICANTE province, particularly the Costa Blanca, remains a top destination for foreign investors looking to invest in real estate in Spain, with 44% of property transactions in 2023 carried out by non-Spaniards.

Discover why ALICANTE province, particularly the Costa Blanca, remains a top destination for foreign investors looking to invest in real estate in Spain, with 44% of property transactions in 2023 carried out by non-Spaniards.

Read more

America's Rental Market: Regions with Climbing and Falling Rents

Discover the latest data on rental market trends in America, including regions where rents are on the rise and where they are falling.

Discover the latest data on rental market trends in America, including regions where rents are on the rise and where they are falling.

Read more

Purpose-Built Rentals: The Future of Commercial Real Estate?

Discover the future of commercial real estate with purpose-built rentals as highlighted in the latest Re/Max report. Explore how landlords are shifting towards this trend for increased density and profitability.

Discover the future of commercial real estate with purpose-built rentals as highlighted in the latest Re/Max report. Explore how landlords are shifting towards this trend for increased density and profitability.

Read more

US Homeowners Experience Near-Record Highs in Home Equity Growth

Discover the latest CoreLogic report findings showing US homeowners gaining an average of $28,000 in home equity over the past year.

Discover the latest CoreLogic report findings showing US homeowners gaining an average of $28,000 in home equity over the past year.

Read more

Rare Low-Rise City Centre Homes Portfolio Hits UK Residential Real Estate Market

Explore the latest update on the UK residential real estate market with the launch of a unique portfolio of 262 single-family houses in city centres, designed for institutional ownership in the UK rental real estate market.

Explore the latest update on the UK residential real estate market with the launch of a unique portfolio of 262 single-family houses in city centres, designed for institutional ownership in the UK rental real estate market.

Read more

Rise in Landlords Investing in Semi-Commercial Real Estate

Discover why investors are flocking to semi-commercial real estate, with applications doubling in 2024. Learn more in our latest blog post.

Discover why investors are flocking to semi-commercial real estate, with applications doubling in 2024. Learn more in our latest blog post.

Read more

Nearly Half of Landlords Planning to Buy More Properties | Landbay Survey

Landbay's latest survey shows strong landlord demand, with nearly half looking to purchase more properties in the next year.

Landbay\'s latest survey shows strong landlord demand, with nearly half looking to purchase more properties in the next year.

Read more

Canada: Montreal Home Sales Increase as Prices Surge

The Montreal real estate market sees a rise in home sales, with prices on the upswing. Find out more about the latest trends in the region.

The Montreal real estate market sees a rise in home sales, with prices on the upswing. Find out more about the latest trends in the region.

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.