The cut in the key rate to 3.25%: A unique opportunity for the real estate market

The cut in the key rate to 3.25%: A unique opportunity for the real estate market

Author Alexandre Feydri
Date Dec 16, 2024, 11:17 PM
Reading time 3 min 38 sec
On December 11, 2024, an important milestone was reached for the Canadian economy: the Bank of Canada announced a reduction in the key interest rate to 3.25%. This decision, expected by many economic players, will have major consequences, particularly for the real estate market. What is the key interest rate and why is it important? The key interest rate is the Bank of Canada's main tool for influencing the economy. It determines the cost at which commercial banks borrow money in the short term. When it decreases, it immediately has repercussions on mortgage interest rates, lines of credit, and savings products. A reduction in the key interest rate to 3.25% is one of the lowest observed in recent years, making this an ideal time to carry out your real estate transactions. 1. Increased accessibility to real estate The main impact of the reduction in the key interest rate is a decrease in mortgage interest rates. This means that buyers can borrow more with lower monthly payments. For example, a mortgage rate of 5% could drop to around 3.5%, significantly reducing the overall cost of a real estate loan. At Langevin Immobilier, we are already seeing an increase in inquiries from potential buyers interested in condos, duplexes, and family homes. This decrease promotes home ownership for young families, first-time buyers, and even investors. 2. Increase in property values A low interest rate environment stimulates real estate demand. This increased demand often leads to an increase in property prices, particularly in attractive markets like Montreal and the South Shore. As a major player in these sectors, Langevin Immobilier is perfectly positioned to maximize the value of your transactions. If you are a homeowner, now is the ideal time to sell. Our statistics show that 27% of the properties managed by our team are sold in a bidding war, with an average of $26,000 extra for sellers. The combination of a low key interest rate and our expertise guarantees optimal results. 3. Revitalization of real estate investment The drop in rates also benefits investors. With lower borrowing costs, real estate investors can more easily finance the purchase of multi-unit buildings or rental properties. The latter represent a long-term opportunity, offering stable income in a context where rental demand remains high. At Langevin Immobilier, we support our investor clients thanks to our Lange2.0 tool, an AI that analyzes market trends to identify the best opportunities. Whether you are looking to acquire a plex in Rosemont or a rental property on the South Shore, we are your strategic partner. 4. Increased mobility for sellers Lower rates also encourage existing homeowners to list their homes to finance the purchase of larger or better-located properties. This creates a positive dynamic in the market, increasing the number of transactions and offering more choice to buyers. With Langevin Immobilier, we facilitate these transitions thanks to our cutting-edge marketing strategies and our expertise in property enhancement. Our international Royal LePage network ensures maximum visibility, attracting local and foreign buyers. 5. An opportunity to renegotiate your mortgage Existing homeowners can also take advantage of this drop to renegotiate their mortgage. A reduction of a few percentage points can represent significant savings over the life of a loan. Our experts at Langevin Immobilier collaborate with financial partners to offer the best mortgage solutions. 6. A boost to the local economy Finally, the reduction in the key interest rate also supports the overall economy. It stimulates consumption, increases household confidence, and encourages investments. In neighborhoods like Villeray, Rosemont, or Little Italy, this revival is reflected in an increase in renovation projects and the enhancement of existing properties. Langevin Immobilier is part of this dynamic by collaborating with local partners such as A Design and Maison H to guide clients in their renovation projects. These initiatives reinforce the value of properties and improve the living environment of residents. Why choose Langevin Immobilier? In this favorable context, the choice of the right real estate partner is essential. Langevin Immobilier stands out through: • An experienced team: Our brokers leverage their expertise to maximize your opportunities. • Innovative tools: Lange2.0, our AI software, identifies the ideal buyers for each property. • An international network: With Royal LePage, your properties benefit from global visibility. • Personalized support: We adapt our strategies to your unique needs. Whether you are a buyer, seller, or investor, Langevin Immobilier is your ally to navigate this evolving market. A decision that redefines the real estate landscape The reduction
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