“First-time homebuyers get a chance to get into the market now,” says Ron Hollett, an agent in Halifax. “The government took them out of the market by taking the 30-year mortgage away. But now they’re starting to come back again.”
Indeed, a lower interest rate is expected to finally entice buyers – and particularly first-time buyers – to enter the market.
“If a first-time homebuyer wanted three-bedroom house in particular area,” George McDaniel, an agent in Halifax, says, “even a small drop in interest rates can enable them to afford what they couldn’t previously.”
However, agents also expect prices to rise as demand for housing starts to pick up.
“Rates add buying pressure, so more people will want to buy,” says Norman Schneiderman, a sales rep in the HRM. “It will allow for more upward pressure on prices.”
Still, that’s pressure that the market can afford. Halifax’s housing market was slow over 2014, with unit sales decreasing 6.5 per cent and new listings falling 2.7 per cent over 2013 levels. The average price of a home realized a moderate 0.7 per cent increase.
“We have an overabundance of listings right now,” Hollett says, “and I think if we clear those up it’ll affect the market and well get back to our normal market – maybe an even market.”
McDaniel, meanwhile, says he’s encouraging clients to jump into the market now – provided they don’t stretch themselves too thinly to do that.
“It’s cheaper money,” he says. “That will make it easier to get in. Interest rates will be tempting, so take advantage while it lasts.”
The Bank of Canada’s decision to cut interest rates is likely to benefit most of the country, but the East Coast in particular is preparing for the surge of buyers cheaper money is expected to bring.