Real estate experts happy with mortgage rates after BoC announcement

Ron Butler, mortgage broker at Butler Mortgage, joins BNN Bloomberg to discuss the latest BoC rate decision and its impact on the housing market.

Real estate professionals are happy with a cut to interest rates but remain troubled over the impact of tariffs, inflation and the job market on the broader economy.

The Bank of Canada cut the key lending rate by 25 basis points to 2.25 per cent Wednesday.

“I think it’s a great move for sure,” Karim Kennedy, CEO of Coldwell Banker Canada told BNN Bloomberg.

”There’s a lot of issues that we all know about, whether it’s some weak GDP growth, unemployment being a little bit higher than we would like, and some unpredictable U.S. trade disruptions, but I think that that rate cut today signals support for the economy from the Bank of Canada.”

Central bank governor Tiff Macklem said U.S. tariffs and trade uncertainty have weakened the Canadian economy, while also adding costs to many businesses are putting upward pressure on inflation.

Executives mixed of impact on market

The cut, widely expected from economists, follows inflation accelerating to 2.4 per cent in September. That’s a jump of half a percentage point from 1.9 per cent in August. The economy however added 60,400 jobs in the same month, driven by increases in full-time work. The jobless rate was unchanged however at 7.1 per cent.

Kennedy said he expects a rebound in the housing market in the fourth quarter of 2025 heading into the New Year. He said the cut creates more financial opportunities for buyers ready to enter the market.

“We’re seeing some pent-up demand, and that can now be unleashed,” said Kennedy.

Keith Reading, senior director of research at Morguard however said the cut won’t significantly boost buyer confidence or market activity due to ongoing economic uncertainties.

“I think in terms of the markets, the feeling is we know there probably are going to be tariffs, and we’ve got an idea of what those tariffs are going to look like, but I think the concern is that there’s inconsistency with respect to the U.S. administration’s handling of tariffs,” Reading told BNN Bloomberg.

Reading said there are bigger issues with affordability. He said prices have come down a bit but are still difficult for first-time homebuyers to buy a house.

“A 25-basis point cut in the bank rate sort of helps a little bit, but I don’t think you’re going to see a big return to the market of home buyers, because they don’t know what the market’s going to look like three months from now or six months from now,” said Reading.

Variable mortgages could be more attractive: experts

Homeowners with variable rates will continue to see immediate relief on their monthly payments after the bank lowered its rate. With the cut following a consecutive slice in September, some said variable mortgages could be more attractive to consumers.

“Every time rates go down, it makes variable more attractive,” Bronwyn Smith, CEO of RealServus told BNN Bloomberg.

RealServus owns Right at Home Realty. “I think we’ll start seeing people poke their head up and look into that.”

“I think we’ll start to see a little bit more interest on the variable side if we continue to see these rate cuts. I would expect them to kick up a bit,” said Smith.

Kennedy said the cut could help nudge confidence for homeowners with variable rates when they have to renew next year but considered the stability of fixed rate mortgages.

“Some people like that stability, knowing that their mortgage payment is not going to change from month to month, while others are happy to roll with it and see what rates are due,” said Kennedy.

Cut to reduce borrowing costs for Real Estate Investment Trust (REITS)

Borrowing costs for Canadian Real Estate Investment Trust (REITS) becomes cheaper, making it easier to finance property purchases and real estate development, according to Coldwell Banker Horizon Realty.

Reading said REITS are a good defensive asset.

‘I think that’s sort of the emphasis for investors right now— is investing in what so called defensive assets that will carry you through these difficult economic times,” said Reading.

Smith said investors should look at where their REITS are invested in. “There’s areas of the market that are looking really positive,” said Smith.

“We’re seeing on the commercial side, vacancy rates getting tighter..anything deep in sort of the condo market, probably a little bit more time required to flush that out.”