Interest rate cuts could soon diminish real estate investment opportunities in Ontario
Published March 22, 2024 at 5:47 pm
Real estate investment opportunities across the GTA and Ontario, such as the purchase of a new condo, could diminish soon due to interest rate cuts.
The Bank of Canada has indicated that it will cut its overnight lending rate three to five times this year. It’s a certainty that condominium prices will start increasing immediately after the first announcement, says Diane Bertolin, partner at Alliance United Corporation, a developer with over 30 years of collective experience.
The central bank’s rate cuts will likely begin in June. If five cuts do indeed occur, that will most likely bring its overnight lending rate to 3.75 per cent — which also means that condo prices could start increasing as early as July, making now the ideal time to purchase a condominium.
“There’s an inverse relationship between interest rates and condo pricing because vertical homes are the affordable alternative to single-family homes, which sell for more than $1 million, in the Greater Toronto Area. That means, according to historical trends, condo prices will increase as interest rates reduce,” Bertolin said.
Diane Bertolin, partner at Alliance United
Canada’s central bank had previously