“Getting into the market is quite affordable with mortgage rates today,” says Ira Jelinek, an agent with Harvey Kalles in Toronto. “It’s better for first-time buyers to take that plunge now. You never win trying to time the market.”
Many of those prospective buyers entering the market for the first time will look toward condos for their inaugural property purchase – a move that Elli Davis, an agent with Royal LePage, says is aided by the BoC’s rate cut.
“The lower rates will enable people who might not have been able to afford a mortgage before,” she says. “They’ll be able to go do that instead of rent.”
However, the lower rates will offer a different story to homeowners who are already in condos and are hoping to finally make the jump into a detached single-family home.
“It’s two steps forward, one step back,” Jelinek says. “It’s going to bring in more buyers, but it will also drive up the prices.”
Indeed, the price gap between condos and detached single-family homes in the city will likely widen, especially considering the continued lack of available listings in some of Canada’s larger cities.
“A lot of people who predicted prices going down were wrong,” Davis says. “Prices don’t seem to be going lower.”
But Davis says that, despite lower BoC rates, buyers aiming to move up the property ladder – namely those looking to shift from condo to single-family home – will continue to base that purchase on more internal factors.
“I think a condo versus a house is more of a lifestyle choice,” she says. “Some people don’t want the responsibility of a house. I think if you’re in a lower price range then you might just go the condo route. I think it’s really based on personal price range.”
Lower interest rates – announced by the Bank of Canada last week – will mostly benefit first-time home buyers, not the average up-sizing clients, say agents.