A possible cut to national interest rates tomorrow could greatly increase homebuyer activity in Ontario

A projected cut to the overnight lending rate could take effect tomorrow (September 4), potentially increasing homebuyer activity in Ontario. 

This projected trimming of national interest — relayed by real estate specialists at Royal LePage — would be the third cut in recent months, as two already took effect this summer.

Currently, the overnight lending rate is around 4.5 per cent, as set by the Bank of Canada, and representatives at Hill & Knowlton who conducted a projections study for Royal LePage have indicated that if a third rate cut were to occur, it could greatly increase home buyer activity throughout the country.

A financial maneuver that would even have a more drastic impact on the real estate market in Ontario, as the GTA recently reported the lowest index of home sales in almost a decade. 

According to additional information from Royal LePage, roughly 75 per cent of prospective homebuyers of younger generations have indicated that purchasing a home is a goal they hope to reach soon. However, less than half of respondents in Ontario (47 per cent) indicated that home ownership is even a remotely achievable goal — the lowest in Canada.

“The youngest cohort of homebuyers in Canada has no shortage of barriers on their path to ownership. Though the cost of borrowing has begun to come down, chronic supply shortages have kept housing prices from dropping, even as demand softened under the weight of high interest rates,” said Phil Soper, President and CEO of Royal LePage in an official statement. 

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Further information relayed by Royal LePage indicated that if borrowing rates saw a substantial drop, 73 per cent of young would-be homeowners would leap at the chance of purchasing a home. 

“Despite these hurdles, the next generation of homebuyers remains committed to their pursuit of owning real estate, and are remarkably optimistic that they can make their dream a reality,” said Soper in another statement. 

At the time of publication, no rate announcement has been made, however, real estate specialists remain optimistic.