Lower rates to boost buyer confidence

by Olivia D'Orazio on 28 Jan 2015
A major Canadian bank has lowered its five-year fixed mortgage rate – and others are expected to follow suit – but some agents believe that won’t have much of an impact on how the housing market performs in 2015.
 
“I don’t believe a quarter-point will make a significant difference,” says Justin Kua, a real estate agent in Toronto. “First-timer buyers are already expecting low rates. It’s just giving people a little more confidence in being able to take on a mortgage.”
 
Over the weekend, the Royal Bank of Canada dropped its five-year fixed rate mortgage to just 2.84 per cent. No other banks have jumped on the rate dropping trend, but Kua says they likely will soon enough.
 
“When the business starts to shift sideways,” he says, “you need to adjust.”
 
Still, Kua expects the market in 2015 to pick up where last year left off, with low inventory being the driving force behind the hot market.
 
“The market is going to be active whether interest rates are high or low,” he says. “Growing families still need to up-size and seniors still need to downsize.”
 
With that said, though, Kua is encouraging his clients to take advantage of a lower rate.
 
“If a client wants to move up and can afford a detached house now, I highly recommend it. It’s way cheaper now than down the line,” he says. “But, buyers should be proactive in paying down the mortgage, because while it’s cheap now, you have to be aware that higher rates are coming. Don’t sit on a huge mortgage assuming rates are going to stay low forever.”
 

Post a Comment

Most Trending News

Upcoming event: Market Intelligence for Today’s REALTORS®
News

This free event will take place on April 25th at 9:30 p.m. and will provide valuable insights on the state of the current real estate market, as well as what the future may hold.

Read More
Google ads for real estate agents
News

If you're looking for a way to get more business as a real estate agent, you should consider Google ads. This is a fast and cost-effective way to generate leads.

Read More
What percentage of real estate agents fail and why?
News

If you're not finding success as a real estate agent, it could be because you're not marketing yourself properly, you haven't set realistic goals, or have poor people skills.

Read More