An expert says the Bank of Canada’s interest rate cuts won’t make a world of difference to those looking to get into the housing market.
Chief Economist with Central 1 Credit Union Bryan Yu says the fact that interest rates are going down makes getting a good rate on mortgages more likely.
“Rates are showing signs that [they’re] coming off, [which is] likely going to mean lower fixed-rate mortgages going forward as well. It’s probably a good time to take a look at what’s on the market” he said.
Yu says even though interest rates decreased he doesn’t think prices of homes would be coming down by a lot.
“We have a lot of demand waiting in the wings right now, whether it’s the stronger of the population growth, or other factors, or people have been kind of sitting on the sidelines in the last couple of years,” he said. “Every time rates come off a little bit, people come back into the market…So clearly there’s a lot of demand in the market.”
The expert adds that first-time buyers will still need a sizable down-payment to be able to purchase property.
“People who may have been able to save money over the last couple of years might be in a position to purchase but it doesn’t make it more affordable,” he said. “I don’t think we’re ever going to be really calling Vancouver ‘affordable.’”
He says he expects home prices to stay stable through the end of this year but they could start to jump up again in 2025.
“We’re not necessarily building a lot of condos or apartment building in terms of housing starts with components, so that’s going to be another factor, that the housing supply is still constrained in this market,” Yu said.