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In December, the Bank of Canada held interest rates at 5% for the second time and the last increase was back in July, making it safe to say that inflation is on the way down (which is very much needed as people don’t have the disposable income like they had over the last couple years). In fact, people are struggling to pay their high rents and mortgage payments. Have you noticed that you can go to your favorite restaurant and basically get a table at any time? That there is more selection at the stores, and lots of sales where you can actually find something you like? Even gas prices are down! The unemployment rate has increased and people are simply staying put to save money. Technically we are in a recession right now as we’ve had 2 consecutive quarters of negative growth, which Statistic Canada shows but the Bank of Canada is not calling it. Once the Government wants to admit that we are in a recession we will start seeing rate decreases, which is why we expect multiple rate decreases throughout 2024 starting in the first quarter.

High interest rates have created one of the best buying opportunities Mark seen since starting his real estate career in 1995.

With the current bond rate at 3.533% (down from the highest it hit in the past few weeks of 4.45%) we will see lower 3 year and 5 year fixed term rates. Based on the current bond the 5 year fixed term mortgage rate should be around 5.19% and at the moment it is at 5.6%. Part of the reason the rates haven’t gone down yet is that the banks typically aren’t aggressive in lending money out at the end of the year. Once the new year kicks in, banks will be more competitive and we will see the 5 year rate down to where it should be at 5.19%. It gets better, we could see the Bank of Canada drop rates 8 times next year. What does this mean? When the spring comes around the market is going to be smoking. Prices are going to move up quickly and right now will be one of the last low opportunities for a long time to come.

News flash, if you’ve been waiting on the sidelines for interest rates to go down you are going to be competing with everyone else that is currently sitting and waiting for the same thing.

The smartest move you could make is to get into contract now to secure the current price and have a closing in a few months when we expect interest rates to be much lower. You’re purchasing the property at today’s low prices with tomorrow’s low interest rates, it’s a double whammy.