A Second Interest Rate Cut, and Cottage Country Expected to See a Price Drop

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Every Friday, Wahi brings you the most important real estate stories from the past week.

One Small Step for Interest Rates, One Giant Leap for Borrowers 

The slow march towards lower interest rates took another baby step forward this week when the Bank of Canada announced another drop of 25 basis points. Combined with an equal reduction in June, the country’s key interest rate now sits at 4.50%, a half percentage lower than the 5% level that began last July, with further reductions expected in the months ahead. The Bank’s governor, Tiff Macklem, is “increasingly confident” that inflation, which stood at 2.7% in June, will continue its progress back to normal levels, at which point he says, “to expect further cuts in our policy interest rate.”   

A Chilly Summer in Cottage Country

The weather may be hot, but the market is lake-cold in Canada’s cottage country this summer. Just a few months ago Re/Max was projecting a near 7% increase in recreational property prices this season due to low inventory and high demand, but it looks like they were wrong on both counts. Now experts warn that high inventory levels and low demand for recreational properties could drive a double-digit price drop this year. Even if interest rates drop significantly, they suggest the best-case scenario for owners is ending the season with their recreational properties worth the same as when it began. 

Toronto’s Worst Condo Market In a Generation 

The last time Toronto’s condo market was this bad Steve Jobs had just muscled his way back into Apple, a British pop group was “spicing up” our lives, and everyone was debating whether Rose had room on that floating door for Jack. According to Urbanation just 3,159 GTHA condos switched hands in the first half of 2024, down 57% from last year, and the lowest in the first-half of any year since 1997, not including the early pandemic. Meanwhile, nearly 26,000 units sit on the market unsold, half of which are pre-construction, putting inventory levels at a new record high.

Canada Tops Global Ranking for Relocation

If you thought high costs, cold weather, and underperforming sports franchises would drive people away from Canada, think again. According to a recent study by UK-based global relocation service 1st Move International, Canada is the most popular relocation destination in the world, based on Google search trends related to moving and relocation. Between 2022 and 2024 over 1.5 million people researched moving to the Great White North, edging out Australia for the top spot, which had 1.36 million searches. Coming in third was New Zealand, followed by Spain and the UK, each of which saw just over 1.1 million inquiries.

Immigration Nation  

As people move in and around Canada, the housing market moves with them. According to Sotheby’s International Realty Canada’s mid-year report, immigration — both international and global — is the primary driving force of housing prices in Canada. While each of Canada’s major cities saw their largest population increases in decades, thanks to international immigration booms, thousands have also left high priced cities for more affordable alternatives. In the first half of the year approximately 93,000 left Toronto, 20,000 fled Montreal and 18,000 left Vancouver for other parts of the country, with about 27,000 relocating to Calgary, which experienced record-breaking sales activity.

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