THIRD CUT'S A CHARM

After three consecutive rate cuts, the fall housing market is heating up. But are first-time buyers still out in the cold?

- CLARRIE FEINSTEIN

It was a surprising start to September for realtor Cailey Heaps, when multiple offers came flooding in on a west-end Toronto single-family home listed just above $2 million.

“It’s been a while since I’ve seen multiple bids,” said the CEO of the Heaps Estrin Team. “We just had 50 people come to an open house, and the number of calls the team has received this last week has been phenomenal.”

Since the Bank of Canada’s three consecutive interest-rate cuts in June, July and September — which brought the key overnight rate to 4.25 per cent from five per cent — Toronto realtors have noticed an increase in phone calls and showings from buyers who have been on the sidelines waiting for rates to drop.

Excitement is brewing amongst some, but first-time homebuyers still need to see a significant drop in interest rates before jumping into the market, while sellers are struggling to navigate a buyers’ market, when buyers have greater negotiating power. When the sales-to-new-listings ratio is below 40 per cent, it’s a buyers’ market, which the GTA has been in since May.

“We won’t have a crazy fall,” said Jarrod Armstrong, a sales representative at Armstrong Team. “But we’re seeing optimism bubble to the surface, for sure.”

Toronto homebuyers come off the sidelines

The Bank of Canada’s rapid rate-hike campaign, which began in March 2022, dampened activity in the real estate market. Even after interest-rate cuts this past June and July, it wasn’t enough to stir any momentum in the market. But the third rate cut on Sept. 4 allowed some buyers to begin their home search and even put down offers.

“I’m seeing an uptick in interest from homebuyers for houses and condos,” said Sean Mayers, a realtor with Torontobased Century 21 Regal Realty brokerage. “It was a quiet summer and now it’s not. Most of that can be attributed to the success of interest-rate drops and also summer is generally a slower period.”