FIRST TIME RATES HAVE BEEN CUT IN 4 YEARS. WHAT NOW?
The long anticipated wait is finally here! The Bank of Canada has cut its overnight rate by 25 basis points. Yesterday’s announcement puts the policy rate at 4.75 per cent, down from the 5 per cent it has been sitting at since July 2023.
This news certainly gives Canadians a sigh of relief and hope towards affordability.
WHAT DOES THIS MEAN FOR BUYERS?
A lower interest rate does lead to lower mortgage payments. Although there will be small break for borrowers, a quarter per cent cut is not much in a grand scheme of things. On a $1,000,000 mortgage, homeowners are saving an estimated $150 per month.
How this cut will really impact buyers is the psychological influence this will have on the market.
Buyers who have been waiting on the sidelines for some good news are now entering the market. An increase of buyer confidence will strengthen the market leading us back to competitive sale prices and multiple offers.
WHAT WE’RE TELLING OUR BUYERS…
As we mentioned, the more buyer confidence the market experiences, there will be an increase in competition which will drive up sale prices. Therefore, if you’re looking to buy, time may be of the essence. Historically, rate cuts occur in bunches, so there is a really strong chance that there will be further cuts in the next overnight rate announcements scheduled on: Wednesday, July 24th and on Wednesday, September 4th – just in time for the fall market!
WHAT DOES THIS MEAN FOR SELLERS?
As mentioned above, buyer traffic will increase. Which means sellers should ensure that they position their property strongly in the market to stand out amongst the competition.
Here’s how sellers should present their property in the best light:
- Ensure the property looks amazing and in the best condition
- Pricing is key! Ensure that the property is competitively priced
- If sellers need to purchase a home, find out what the best strategy will be for you. Should you buy before, after or at the same time of selling your property? (seek guidance from your real estate professional)
WHAT WE’RE TELLING OUR SELLERS…
Exciting news, buyers are en route! We make sure our seller’s property is presented in top-notch condition by recommending necessary repairs and improvements. Afterwards, we bring in our trusted staging team to boost the property’s appeal and catch the eyes of many buyers.
To learn more about how to effectively stage your property to sell faster and at the highest price, visit link: http://HOW TO EFFECTIVELY STAGE YOUR HOME: SELL YOUR HOME 10X FASTER
After a comprehensive analysis of the market and similar properties, we then make sure we nail the pricing and come onto the market strong! Fair pricing is like a magnet in real estate. A property that is priced appropriately is more likely to attract potential buyers.
For tips and strategies on how to set a right price, read our blog here: The Art of Fair Pricing: Why Setting the Right Price Matters in Real Estate
If you are looking to buy or sell and want to take advantage of this time in the market, reach out to us today and we’ll be happy to guide you through!