Real estate experts say the Bank of Canada will need to cut the interest rate by a full percentage point to stimulate sales.
At least a full percentage point drop is needed to stimulate the market, which could be reached by the end of the year, said John Lusink, president of Right at Home Realty. On Wednesday morning, the Bank of Canada dropped the key overnight rate by another quarter percentage point, bringing it to 4.5 per cent.
"It's not a surprise that the Bank of Canada lowered its rate, but I'm disappointed it wasn't a 0.5 percentage-point drop," Lusink said.
"That would have really stimulated the market. Will this recent rate cut have a dramatic effect on sales? No, I don't think so. It's still wait and see for a lot of people." That's because mortgages rates, while lowering, are still high for many people, said Leah Zlatkin, mortgage broker and Lowest Rates.ca expert. Homeowners with a variable rate mortgage, which is tied to the Bank of Canada's prime rate, will see an immediate impact on their mortgage payments. And for buyers interested in opting into a variable-rate mortgage, the lowest variable rates will decrease to about 5.75 per cent.
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Disgraceful behaviour on Parliament Hill
‘Was it you or not?’ Jagmeet Singh confronts heckler on Parliament Hill, Sept. 17
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Dutcher wins second Polaris award
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