BoC Cuts Rate Again..Now What's Next?

The Bank of Canada has just lowered rates again, marking the third reduction in a row, totalling a 75-basis-point cut. This is creating new dynamics in the housing market, particularly for those with variable-rate mortgages. Here’s how I see this affecting condo investors:

1) Continued Rate Cuts on the Horizon Market forecasts predict continued rate cuts by the Bank of Canada over the next 12 months, potentially dropping the overnight rate to 2.5-2.75% from 4.25%, with two more cuts expected this year. This is driven by a slowing economy and cooling inflation. If this trend holds, mortgage rates could be significantly lower by late 2025, likely boosting real estate activity. 2) Current Challenges In The Market A surge in new condo completions hit the market in 2023/2024 just as buyer demand weakened. Investors saw negative cash flow due to increased mortgage payments. Expect the market to stabilize as rates come down further and buyers come off the sidelines to start working through the excess inventory. I believe this is around the corner, but the question is...how long will it take to get through excess inventory?

Despite These Factors, It's Still A Perfect Storm...because the demand isn't gone..the buyers are just waiting on the sidelines! As the market is expected to begin its recovery in 2025, what we’re witnessing right now is creating a perfect storm for savvy investors.  With new condo completions set to plummet after 2026, the stage is being set for a supply shortage, which we expect will lead to rapid price increases in the coming years. The combination of slowing supply and an eventual increase in demand makes this a pivotal moment for long-term investors looking to capitalize on future market dynamics. Sellers hold! Buyers buy! Why Pre-Construction Condos is the ideal choice for investors and first homeowners?  All market dynamics are hinting at lower supply and higher prices in the future..anyone who can manage to put down a low deposit now without worrying about getting a mortgage for the next 2-3 years...will take advantage of the future market conditions.  Feel free to reply to this email, if you would like to discuss your options or learn more about investing in real estate.  Connect

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