Real estate market awaits BoC move

Analysts believe an interest rate cut could spark a buying frenzy after months of stagnant prices

- JOSH RUBIN

The Bank of Canada will announce its decision Wednesday

The Bank of Canada is set to announce Wednesday whether it's going to finally start cutting interest rates for the first time in more than four years.

Traders and some economists - are betting that the answer is yes.

Real estate analysts are also looking forward to Wednesday's announcement, saying that it could spark a buying frenzy after months of stagnant prices.

"If we do see a rate cut this week, it's going to really, really jump-start the market and I think you're going to see a lot more offers being made, and that inventory starting to come down," said real estate consultant and former Queen's University professor John Andrew, who estimated that residential real estate prices in the Greater Toronto Area could rise by up to six per cent by the end of the year.

Andrew expects the bank to cut its key overnight lending rate by 25 basis points (a quarter of a percentage point), to 4.75 percent.

Since last July, the bank's key overnight lending rate has sat at five percent. The bank raised rates 10 times between March 2022 and last summer in a bid to wrestle inflation down to its two per cent target.