The Bank of Canada surprised many this month by holding interest rates steady in response to the instability of what’s happening in the US. Governor Tim Macklem said “We still do not know what tariffs will be imposed, whether they'll be reduced or escalated and how long all of this will last.”
There are massive industries being affected right now, and even though there’s currently a 90 day hold on the tariffs, things could change tomorrow because the US is so erratic. It’s a scary time, so understandably, buyers are not confident that this is the right time to make a move.
A rate reduction would have been more positive, but perhaps we’ll see that happening on June 4, when the next rate announcement is scheduled. However, 7 rate reductions in a row weren’t quite enough to move the dial a ton, so another rate reduction likely wouldn’t have had a major impact. Sellers seem to be feeling positive though. In March, Toronto saw over 6,400 new listings, but just 1,908 sales. And I think we’ll see another uptick of increased listings after Easter Weekend. I expect we’ll see hundreds of new listings hit the market over those two days; we usually do every year at this time.
Personally, I try to stay ahead of the curve – I have two new listings that I brought to market this week! Click here to see those!
It’s not just rates and tariffs that people are concerned about. The upcoming Federal election is also affecting the market. Elections always slow the market to a certain degree, because people are waiting to see what happens. Although people here are fairly polarized, it’s not as extreme as the differences in the US between left and right. I do think the housing market will be affected by our next PM. There is a sense that if Carney gets in, there will be a little more respect for Canada, which could boost confidence. Talk of us becoming the 51st state hasn’t been in the conversation since Carney went to visit the White House and was actually addressed as Prime Minister. I’m not confident the same would be true should Poilievre be elected.
Regardless of what happens with the numbers of buyers or sellers taking action, I don’t think there will be a major change or downturn price-wise. But certainly all this craziness happening is making people think “I need to squirrel away my nuts,” and not do anything until they have more certainty that their job is secure, the economy won’t collapse – and they can afford groceries.
Despite all the doom and gloom, there are opportunities in the market. With the sheer number of listings out there, if you are particular about what you’re looking for, there is a good chance you’ll be able to find it. Also, there are sellers on the market who really need to sell and will have to face the reality of what the market will bear right now. The houses selling quickly and for top dollar are the ones in the right neighbourhoods and have been completely renovated. Few buyers want to move into a place that requires some work, especially now with how high construction costs are these days.
If you’re curious about what’s happening in your neighbourhood or want to chat about the market, please reach out!
