The effect of the rate cut was already felt on Wednesday by an online mortgage service provider, while real estate brokers do not expect to see much excitement in the markets right away.
Published at 12:53 a.m.
Updated at 6:00 a.m.
For a month and a half, customers of Ratehub, which offers online mortgage services, have been waiting for the June 5 announcement before taking out a mortgage loan, Philippe Simard, mortgage director for Quebec, said by telephone.
“Because there were a lot of speculations regarding the June announcement,” he analyzes. Since we have the confirmation, we expect that more people will take out a mortgage loan, and this has already started. In just one day, three of my brokers told me that clients we had been talking to for a month and a half came back Wednesday to ask what the effect of the drop was. »
The Bank of Canada’s key rate has a direct effect on variable rates, recalls Philippe Simard. However, there are still many people who think that the effect is also direct on fixed rates, he observes, when that is not the case.
Estate market
The liquidator of an estate on the South Shore of Montreal tells The Press that she was waiting for a rate cut before putting the house of her father who died last March up for sale.
“I wanted to take the time to get things done right and I told myself that a rate cut, combined with the RAP [régime d’accession à la propriété]which went from $35,000 to $60,000 during the last federal budget, would surely help to generate interest in the family home, the price of which will be accessible to first buyers,” explains the liquidator on the telephone, who does not does not want her name to be mentioned in order to avoid being even more solicited by real estate brokers who want to sign a brokerage contract with her.
“A quarter of a point is not enough to make a marked difference in budgets, but it changes the tone,” notes Marc Lefrançois, approved real estate broker at Royal LePage Tendance, on the ground.
“A lot of people said: I’m not touching the market, because the Bank of Canada is not reassuring at all with its speech on inflation and possible increases. There, the statistics of recent months have changed and the Bank of Canada is completely changing its position. The fact that rates will decrease gives confidence to a percentage of potential buyers. »
According to Marc Lefrançois, this slight rate drop will motivate home owners worth around $600,000. These well-established people with good jobs, who dreamed of a larger and better located $1 million property, had been out of the market for a year and a half.
“Those who want to update upwards are starting to come back into the market since the anticipation of rate cuts and then the confirmation now that rates should start to fall,” he observes.
Martin Desfossés, real estate broker at RE/MAX Bonjour, maintains that brokers and buyers were hoping for a more marked reduction in rates, because transactions in certain regions of Quebec are slow.
However, if first-time buyers do not have access to the market with rising rates, the broker foresees fiercer competition in the coming months.
“By reducing rates, it helps first-time buyers, but it also helps those who already have more purchasing capacity,” explains Martin Desfossés. Competition will put upward pressure on sales prices and inevitably put pressure on buyers. »
