I wrote a Blog couple weeks ago about interest rate hikes this year. Well Bank Of Canada has not done anything about rate cut but it did not increase interest in last meeting. As i mentioned in the blog that there are chance of interest rate cut, yesterday RBC did reduce there fixed interest rate by 0.15 point basis, which means you can have little less monthly payments. What that means to current real estate market? it wont affect the real estate market. In my opinion, if Bank Of Canada cuts its interest rate and gets rid of stress test that might affect real estate market. Reason behind that is lot of buyers and first time buyers are not qualifying for mortgages.
With stress test gone, more buyers will qualify and there borrowing limit will be more than what they can borrow as of now. Lot of buyers are holding back as they can`t afford the dream home they want cause of borrowing limit. Lot of Apartment and Townhouse owners who bought before the recent boom has lot of equity built up. They want to upsize with growing needs but cannot qualify for bigger mortgage. All this is speculation, Time will tell what course market takes. Good new for buyers that are looking to buy now will have lower monthly payments with interest rate cut by RBC. More Banks will follow RBC as they have to compete with each other for business. Whats next? dont know, time will tell as it all depends on economy and what Bank Of Canada will do.
As a Realtor in surrey for years, i have seen market upturn and downturns. If you have any question regarding real estate in surrey, feel free to text, email or call me. If you are active buyer or seller shoot me email for free Buyer`s guide or Seller`s guide.
To read in details about Interest rate hikes this year Click Here.