Bank of Canada Rings in Year of the Snake with Rate Cut to 3% - Fifth Avenue REM mediaiqdigital tracking pixel
Home Buying, Market Intelligence, Real Estate News, Your Next Home | January 29, 2025

As Canadians usher in 2025, and many in the country celebrating Lunar New Year welcoming the Year of the Snake, the Bank of Canada has marked the occasion with a significant monetary policy decision. On January 29, 2025, the Bank announced a 25 basis point reduction in its target for the overnight rate, bringing it down to 3%.

The decision to lower the interest rate is primarily influenced by the looming threat of new U.S. tariffs, which has introduced considerable economic uncertainty. Despite recent upticks in economic growth, bolstered by previous rate cuts, and inflation rates hovering near the 2% target, the potential for these tariffs poses a significant risk. In response, the Bank aims to stimulate economic activity and mitigate potential downturns by reducing borrowing costs.

For prospective home buyers, as stated in past articles, this rate cut means lower mortgage rates, enhanced purchasing power, and allows those first-time purchasers to have a lower range for their stress test. This is a great time to look at that new home you’ve been wanting to purchase! Might we recommend a new condo or townhome at Highstreet Village?

For realtors, the decreased borrowing costs make it favourable for your clients to make that next move! Heightened activity will allow realtors to see an uptick in client interest – now’s the time to book those appointments with our sales teams.

For investors, now is the time to take advantage of lower interest rates on that next real estate investment. Real estate will make a great long-term investment, since lower interest rates will reduce yields on savings accounts and fixed-income investments. Might we suggest a new condo at Highstreet Village?

In summary, the Bank of Canada’s recent interest rate reduction aims to bolster economic resilience amid external uncertainties. Don’t hesitate and wait too long on your next home purchase – there’s opportunity now to capitalize on incentives and new home inventory before the housing market picks up steam again and competition drives price increases further.

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