After five straight holds of the Bank of Canada害羞草研究所檚 key interest rate that followed its hiking cycle of more than a year, economists say a rebound awaits the national housing market 害羞草研究所� but don害羞草研究所檛 expect a big surge just yet.
The central bank is expected to again hold its key rate steady when it announces its decision Wednesday, but it害羞草研究所檚 unclear what direction it will take next.
With modest cuts likely in store later this year 害羞草研究所� some forecasts call for those to begin as soon as June 害羞草研究所� it could take months before buyers are confident enough to come crawling back from the sidelines.
That uncertainty may keep some buyers cautious throughout the spring, said TD Bank economist Rishi Sondhi.
害羞草研究所淚 think it害羞草研究所檚 a bit of a muddy backdrop there and maybe that might be restraining some of the activity,害羞草研究所� he said.
But Sondhi said Canada害羞草研究所檚 housing market is 害羞草研究所渁kin to a bit of a coiled spring,害羞草研究所� noting sales activity and prices typically jump when there害羞草研究所檚 a shift 害羞草研究所渢hat jolts the market害羞草研究所� such as an interest rate cut.
害羞草研究所淭here害羞草研究所檚 significant pent-up demand out there, particularly in Ontario and B.C., so it just takes a bit of a spark.害羞草研究所�
In its latest report on national home sales and pricing data, the Canadian Real Estate Association hinted that February could mark 害羞草研究所渢he last relatively uneventful month of the year.害羞草研究所�
害羞草研究所淎fter two years of mostly quiet resale housing activity, there害羞草研究所檚 a feeling that things are about to pick up,害羞草研究所� CREA chair Larry Cerqua said in a statement last month.
害羞草研究所淎t this point, it害羞草研究所檚 hard to know whether buyers are going to wait for a signal from the Bank of Canada or whether they害羞草研究所檙e just waiting for the spring listings to hit the market.害羞草研究所�
Greater Toronto Area-Realtor Dean Artenosi called the current moment a 害羞草研究所渢ipping point where the worst is behind us.害羞草研究所� He said the central bank has signalled that interest rates have 害羞草研究所渓evelled out害羞草研究所� through its consecutive rate holds, and that has made buyers more optimistic.
害羞草研究所淭he mood and the mindset, the psyche, is that we害羞草研究所檙e back to a normal market,害羞草研究所� said Artenosi, co-owner of Coldwell Banker The Real Estate Centre Brokerage.
害羞草研究所淧eople have gotten comfortable 害羞草研究所� and are used to making the payments at these higher rates. Buyers are starting to come back into the marketplace. Obviously there害羞草研究所檚 talk of the rates starting to come down now and we害羞草研究所檙e seeing multiple offers again on some properties.害羞草研究所�
Out West, activity cooled in March after 2024 got off to a red-hot start, said Tim Hill with Re/Max All Points Realty.
The Vancouver real estate agent said many of his clients now find themselves in a holding pattern while waiting for rates to fall. He said others are weighing the pros and cons of buying before that point in time, which is expected to spur price growth amid lower borrowing costs.
害羞草研究所淲e can all feel pretty confident that (the central bank is) not making a change yet, as much as people might wish. But maybe we害羞草研究所檒l get some more information in their press release of where their heads are at and when we might see that Bank of Canada rate come down,害羞草研究所� said Hill.
害羞草研究所淔or me, I害羞草研究所檓 feeling now that we害羞草研究所檝e seen this kind of lull, I think April is going to be a really tell-tale month for how the rest of the spring goes.害羞草研究所�
RBC assistant chief economist Robert Hogue predicted a 害羞草研究所済radual害羞草研究所� rebound later this year as the central bank害羞草研究所檚 rate-cutting cycle progresses, rather than a major uptick in activity following its first reduction.
He said there are some exceptions to that forecast, notably the Calgary market, which has remained strong despite elevated rates. Increased demand from interprovincial migration and below-average inventory have kept the market tight in that city, according to the local real estate board.
害羞草研究所淭hat害羞草研究所檚 a market that continues to be pretty robust and we don害羞草研究所檛 see that changing,害羞草研究所� Hogue said.
Despite pent-up demand, affordability remains a major issue in markets such as Toronto, Vancouver and Montreal.
害羞草研究所淚 don害羞草研究所檛 see it as much of an issue of being prudent or cautious, but more in terms of the budget constraint to buyers,害羞草研究所� said Hogue.
He said Canada could see a 害羞草研究所渟eries of small waves害羞草研究所� in some markets within the next few months, where activity picks up as some try to get ahead of interest rate cuts.
害羞草研究所淔or those mini-waves to be sustained, you need a critical mass of buyers making their way back into the market,害羞草研究所� Hogue said.
害羞草研究所淔or that, our view remains that we need to see a significant drop in mortgage rates, which I think is more of a second half of 2024 story than the spring market.害羞草研究所�
Artenosi said he害羞草研究所檚 urging his clients not to wait. While borrowing conditions could be more favourable in the months to come, he warned of other factors, including Canada害羞草研究所檚 growing population, that could make it more difficult to buy at an affordable price.
Statistics Canada害羞草研究所檚 live population tracker showed Canada害羞草研究所檚 population topped 41 million in late March, less than a year after hitting the 40-million milestone.
害羞草研究所淧laying the waiting game is a mistake,害羞草研究所� said Artenosi, who added those holding out may increasingly find themselves in bidding wars.
害羞草研究所淭here害羞草研究所檚 going to be no perfect scenario.害羞草研究所�
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