09/14/2026
Canada: Rate Cuts Can Worsen Affordability
As someone who closely follows the dynamics of Canadian real estate, I find it important to highlight recent central bank research on interest rate cuts and housing affordability. The findings are clear: when rates are lowered, housing demand in Canada jumps quickly, with resales rising soon after and peaking about 18 to 24 months later. However, new housing supply only starts to catch up roughly two years after rates are cut, as builders need time to plan, secure permits, and respond to the improved market conditions. This lag means that while borrowing becomes cheaper, affordability pressures don’t ease right away—in fact, heightened demand can push prices even higher before supply can catch up. Strong job markets and easier lending amplify this effect, as buyers feel more confident to act fast. For those considering real estate investment or looking for insights on timing and strategy, understanding these cycles is essential. As always, I’m dedicated to keeping my clients informed and helping you make sense of the market’s nuances.