For those considering buying real estate, based on the news in the last 24 hours, you might think about making a purchase sooner rather than later.

Yesterday, Canada’s Consumer Price Index (CPI) unexpectedly fell to 1.95%, dipping below the Bank of Canada’s (BoC) inflation target.  The BoC had not anticipated hitting this target until next year, and the overnight rate is still 150 basis points above what’s considered neutral.  And today the United States Federal Reserve dropped rates by 50 basis points, something that won’t go unnoticed by the BoC as they contemplate their next moves.

What Does This Mean For You?

• Potential for Lower Mortgage Rates: The CPI drop suggests weaker inflation, which is why market expectations are for the BoC to lower interest rates to stimulate economic activity.

• Impact on Property Investment: Of course, if you’re looking to buy property, lower rates can be a great opportunity.  With rates potentially decreasing, you might be secure a more affordable mortgage, saving money over time, and you might qualify for more than you might have originally thought.  Evaluating your financing options and considering making a move in the real estate market right now might be a wise choice.

• Potential Impact on Property Values: As more buyers might jump back into the market due to lower mortgage rates, property values may start to rise. Increased demand from buyers looking to take advantage of favorable borrowing conditions could drive up prices, making it beneficial to buy now before values potentially climb.

What Should You Do?

Stay in touch to understand how these changes could impact your options. This unexpected CPI drop might present a timely opportunity for better financing conditions and potentially influence property values in your favour.  Reach out anytime to discuss, I’m always happy to help.

Statistics referenced from MortgageLogic.news Mortgage Memo: Sept 17