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Policy Rate Cuts Not Expected To Re-Ignite Canadian Home Prices This Time

New Reduction Unlikely To Spark Surge in Homebuying Activity, Even if the Bank of Canada Continues To Lower Rates Forcefully

While the decision by the Bank of Canada to lower its policy interest rate may provide a psychological boost and attract potential buyers who have been waiting on the sidelines, it is not expected to trigger a significant change in the current balanced housing market. (Getty)
While the decision by the Bank of Canada to lower its policy interest rate may provide a psychological boost and attract potential buyers who have been waiting on the sidelines, it is not expected to trigger a significant change in the current balanced housing market. (Getty)

Now that the Bank of Canada has cut its policy interest rate for the first time in four years, some market participants may be bracing for the possibility that house prices will awaken from their current slumber, given the substantial underlying pent-up demand for housing in Canada.

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