January 29, 2025 | Announcements

Bank of Canada’s latest rate cut: Impact on Toronto real estate

On January 29th, 2025, the Bank of Canada made a move that could shake up the Toronto real estate market—cutting interest rates by 25 basis points to 3.00%. This change is all about making borrowing more affordable and supporting economic growth. For buyers and sellers in Toronto, it means lower mortgage rates, which could have a big impact on your next move. Whether you’re buying your first home or considering selling, here’s what you need to know about this latest rate cut.

What does the rate cut mean for buyers?

For Toronto homebuyers, the rate cut is a positive development. Lower interest rates make borrowing more affordable, reducing monthly mortgage payments and easing the financial burden for first-time buyers or those looking to upgrade. Buyers who’ve been waiting for more favourable conditions may now be motivated to enter the market.

However, with more buyers likely entering the market, competition could heat up, particularly in popular areas with limited inventory. Buyers should be prepared for a more competitive environment as more affordable financing options drive demand.

What does the rate cut mean for sellers?

For sellers, the rate cut could increase buyer interest, leading to faster sales and potentially higher prices. With more buyers able to afford larger homes or homes in better locations, demand is likely to rise—especially in high-demand neighbourhoods.

Sellers who may have hesitated to list could now find the market more favourable. Homes may sell quicker if priced competitively, but sellers should be mindful of inventory levels. More listings could help balance the market, while limited inventory could push prices higher.

What’s ahead for 2025?

As we move into 2025, Toronto’s real estate market is expected to see more activity. Lower mortgage rates will make buying more affordable, but this could also spark more competition for homes, particularly in the city’s most desirable areas.

For sellers, the increased demand may mean quicker sales, especially if new listings start to come onto the market. However, if inventory remains tight, prices could continue to rise in sought-after neighbourhoods.

Looking forward

The Bank of Canada’s rate cut is likely to keep the Toronto real estate market competitive in 2025. Buyers should take advantage of lower rates, and sellers may want to list sooner to benefit from heightened demand. However, market conditions will depend on inventory levels and how quickly new listings hit the market.

Have questions about how the Bank of Canada rate cut impacts you? Reach out today— our experienced agents are here to guide you through your next steps!

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