The Rate Cut Everyone Has Been Waiting For: BoC Drops Key Interest Rate By 0.50%

by Lia Del Bonifro

The Bank of Canada cut its overnight rate target by 0.50% to 3.75%, with the Bank Rate at 4%. Global economic growth is expected to be 3% over the next two years, while inflation has fallen near central bank targets. Growth is forecast to gradually strengthen, driven by lower interest rates, stronger consumer spending, and housing demand.

Inflation dropped from 2.7% in June to 1.6% in September. Core inflation is now below 2.5%, and pressures are more balanced. The Bank expects inflation to stay close to its 2% target and thus reduced the policy rate by 50 basis points to support growth.

Future rate changes will depend on economic data, with a focus on maintaining price stability near the 2% inflation target.

Here's my take:

The 2024 fall real estate market hasn’t seen the typical surge of activity we usually expect this time of year. Many buyers and sellers have been holding off, anticipating a significant rate cut, which has finally arrived.

I’m optimistic we’ll see more balance in the real estate market in the coming months, driven by the financial benefits that now favour buyers and sellers acting sooner rather than later.

For Sellers

This is a great time to list your home to avoid competition due to low inventory but increasing buyer demand. If you're priced accurately, you will be in a strong position to get your price without other listings pulling it down.

For Buyers

If you haven't secured a pre-approval yet, now is your time. The last couple years have been challenging, especially for those with tighter budgets, but today’s rate cut, along with the future potential removal of the stress test, makes the outlook brighter.

Need personalized advice? Contact me directly to discuss how this change may affect your real estate goals.

The Rate Cut Everyone Has Been Waiting For: BoC Drops Key Interest Rate By 0.50%

by Lia Del Bonifro

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