With a federal election on the horizon, another interest rate drop, and pending tariffs in play, many homeowners and prospective buyers are wondering what this all means for the real estate market.
Interest Rates: A Small but Positive Shift
We’ve been hearing for months that lower interest rates will help the market, and while there has been some improvement, the changes have been incremental. The latest quarter-percentage-point rate cut is a step in the right direction, but its effects remain to be seen. Additionally, the Bank of Canada has eased quantitative tightening policies, meaning there’s now more liquidity in the financial system, making it slightly easier for buyers to access mortgage financing.
Lower interest rates typically boost demand, which has already started happening, especially since the government introduced 30-year amortization options for first-time buyers. More buyers have entered the market, but affordability remains a significant concern.
Tariffs and Their Potential Impact on Ontario’s Market
Ontario’s economy relies heavily on manufacturing, and new tariffs could negatively impact employment and economic stability. While lower interest rates may make mortgages more affordable, job security is equally crucial.
Market Trends by Price Range in Ontario
Real estate conditions continue to vary significantly based on price point:
- Homes under $600,000 – 1 month of inventory (extremely low supply, strong seller’s market).
- Homes between $600,000 – $800,000 – 2.5 months of inventory (still a seller’s market but moving more slowly).
- Homes over $900,000 – 15 months of inventory (a significant oversupply, favouring buyers).
What to Expect in 2025?
While the market will likely see increased sales activity, price appreciation could remain sluggish. The market is expected to be slow but steady, with prices potentially trending slightly upward by the end of the year. However, economic factors like employment levels and international trade policies will significantly shape the market’s trajectory.
Final Thoughts
If you’re considering buying or selling, staying informed about economic trends and policy changes is crucial. While lower interest rates provide a boost to affordability, broader economic stability will determine the market’s direction in the long run.
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