Everyone Says "Buy Now". Really?

I think I speak for most of us when every news outlet you turn to has the same message: "The market is down, it's a buyer's market!" Most of these articles are written by real estate associations, mortgage brokers, developers, and banks. Truth or overly positive? Let's be honest: Real Estate Agents earn commission on transactions, Mortgage brokers earn money when mortgages are written, developers have a lot of inventory to move, and banks profit from mortgage origination.

So why does everyone seem so convinced that right now, in a market that is clearly struggling, is the perfect moment to make one of the biggest financial decisions of your life?

The Two-Factor Argument

It basically comes down to a combination of two things: high inventory and interest rates. Everyone knows the market is slow, inventory is at an all-time high, and your negotiation power is possibly strong. On the other hand, more buyers might come into the market when the Bank of Canada announces cuts its rates.

With the Bank of Canada's policy rate currently at 2.75%, market consensus expects one to two gradual 25 basis point cuts through the remainder of 2025, bringing rates to approximately 2.25-2.50% by year-end. These anticipated rate reductions could increase your purchasing power or reduce monthly mortgage payments. However, as borrowing costs decrease and affordability improves, more buyers are likely to enter the market, potentially reducing your current negotiating advantages in what may become a more competitive environment.

Please remember that forecasts are sensitive to major shifts in trade policy, inflation, and economic growth. All outlooks should be viewed as subject to change based on evolving data and global events.

But What About Market Reality?

But what about market sentiment and economic uncertainty? True North Mortgage's data shows that "49% of prospective home buyers have put their plans on hold due to the U.S. trade dispute." BMO's analysis notes that "trade and Trump disruption are making their way through the economy, likely keeping the Canadian housing market tempered for a few more months."

Translation: Even if rates drop, buyers might stay scared longer than expected.

And what about increased inventory coming from new homes? Mortgage Sandbox reports that "16,000 unsold new homes are sitting in the pipeline, with condo inventory potentially jumping 60% in 2025." Plus, "no new projects were released in January 2025" compared to an average of 750 units in previous Januarys.

Translation: Supply could keep overwhelming demand even with lower rates.

Rate Cuts Aren't Guaranteed

While many have been projecting significant rate cuts from the Bank of Canada, the reality is far more uncertain. The Bank of Canada is not expected to cut its rates in July, as it remains cautious amid ongoing economic uncertainty, particularly from volatile US tariff policy and unpredictable trade negotiations. In fact, the Bank has already held its benchmark rate at 2.75% for two consecutive decisions, adopting a wait-and-see approach until it has a clearer view of inflation trends and economic performance.

When we look at BMO's analysis, it shows that "The Bank of Canada's careful approach to further easing has pinned variable mortgage rates above 5-year fixed, leaving precious little borrowing-cost relief so far in 2025."

What this means: Rate cuts aren't guaranteed to be as fast or as deep as everyone's projecting.

Three Possible Scenarios

Now let's break it down in a couple of scenarios:

Scenario 1: Rates Drop Slowly: If the Bank of Canada is more cautious than expected, you could have months or even a year of continued buyer-friendly conditions.

Scenario 2: Economic Uncertainty Persists: Central 1's forecast notes that "early weakness points to another disappointing year for the housing market." If trade tensions worsen or recession fears grow, buyers could stay on the sidelines regardless of rates.

Scenario 3: The Supply Tsunami Continues: With 16,000 units in the pipeline and developers holding back new projects, supply could continue overwhelming demand even with lower rates.

The Honest Assessment

Yes, current conditions favor buyers with lots of selection and negotiating power. Yes, lower interest rates would increase buying power and potentially bring more competition. But no, this doesn't automatically mean you should rush to buy right now.

A Better Framework for Your Decision

Instead of asking "Should I buy now because rates might rise?" ask:

Financial Questions:

• Can I afford the monthly payments if rates stay elevated?

• Do I have stable income for the next 5-10 years?

• Can I handle a potential further 10-15% price decline?

Lifestyle Questions:

• Do I need to buy for life reasons (growing family, job stability, etc.)?

• Am I prepared to stay in this home for at least 5-7 years?

• Can I afford the opportunity cost of tying up my capital?

Market Timing Questions:

• Am I buying because of fundamentals or because someone told me to?

• What happens to my plan if rates don't drop as expected?

• What happens if they drop but prices keep falling anyway?

The Bottom Line

The "buy now" messaging isn't necessarily wrong, but it's often oversimplified and motivated by industry interests rather than your specific situation. The interest rate expectations might be right, but they're based on assumptions about economic recovery, trade relationships, and consumer behavior that could easily change.

Your decision should be based on your finances, your life situation, and your risk tolerance, not on projections about what other people might do when rates change. The Vancouver market has "reset, not crashed," according to the analysis. That means we're in a new normal, not a temporary opportunity that you'll miss forever if you don't act in the next six months.

Take your time. The data suggests this buyer-friendly environment isn't disappearing overnight, regardless of what the interest rate cheerleaders are telling you.

Remember: The best time to buy is when it makes sense for your life and your finances, not when someone else's commission depends on it.

If this analysis has you thinking about your decision differently, apply that same critical thinking to choosing an agent. Just like you shouldn't rush into buying because rates might drop, don't rush into working with the first agent you meet. AgentMarket.ca lets you compare agents' track records, client reviews, and approach because the person guiding your biggest financial decision deserves the same scrutiny as the decision itself.

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