{"id":24757,"date":"2024-10-16T10:10:13","date_gmt":"2024-10-16T17:10:13","guid":{"rendered":"https:\/\/www.roryc.ca\/blog\/?p=24757"},"modified":"2024-10-07T12:44:29","modified_gmt":"2024-10-07T19:44:29","slug":"emerging-housing-market-new-normal-rates-easing-cycle-flexible-pre-sale-incentives-in-q4-and-beyond","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2024\/10\/emerging-housing-market-new-normal-rates-easing-cycle-flexible-pre-sale-incentives-in-q4-and-beyond\/","title":{"rendered":"Emerging Housing Market &#8220;New Normal&#8221; : Rates Easing Cycle, Flexible Pre-Sale Incentives in Q4 and Beyond"},"content":{"rendered":"<p style=\"text-align: justify;\">The Bank of Canada solidified its position on quantitative easing with a third consecutive rate cut in September, trimming the benchmark rate by a quarter-point to 4.25%. As we move further into fall, the stakes are higher than ever, with both buyers and sellers navigating a market shaped by ongoing economic uncertainties and shifting sentiment. Lower borrowing costs may create new opportunities for some, while others remain cautious amid broader economic trends.<\/p>\n<p style=\"text-align: justify;\">Here are five things to expect in Q4 and into 2025 as the presale landscape adjusts to this new rate environment.<\/p>\n<p style=\"text-align: justify;\"><strong>The Bank of Canada will Maintain its Easing Cycle<\/strong><\/p>\n<p style=\"text-align: justify;\">The Bank of Canada\u2019s most recent rate announcement struck a decidedly dovish tone, pointing to waning economic activity through June and July, a softening labour market in both Canada and the United States, and inflation slowing to 2.5%. Statistics Canada affirmed the BoC\u2019s position with its most recent consumer price index imprint, showing the annual inflation rate at 2%\u2014its lowest level since February 2021, and the Bank of Canada\u2019s overall target rate.<\/p>\n<p style=\"text-align: justify;\">According to remarks from Governor Tiff Macklem in response to the Bank of Canada\u2019s most recent monetary policy decision, \u201cIf inflation continues to ease broadly in line with our July forecast, it is reasonable to expect further cuts in our policy rate. We will continue to assess the opposing forces on inflation, and take our monetary policy decisions one at a time.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>Most Buyers Will Take a &#8220;Wait-And-See&#8221; Approach Until Next Year<\/strong><\/p>\n<p style=\"text-align: justify;\">Though the Bank of Canada\u2019s easing cycle has been met with optimism, caution remains the keyword when it comes to buyers this fall. Despite favourable market conditions, many buyers remain on the sidelines as they weigh the effects of inflation and household affordability. This lack of urgency has translated to intense competition between developers, as they attempt to woo the same small pool of motivated buyers.<\/p>\n<p style=\"text-align: justify;\">As pent-up demand grows, the spring market will act as a bellwether of what\u2019s to come. \u201cAlthough market dynamics have greatly shifted over the past 24 months, prices have stayed relatively flat,\u201d explains Garde MacDonald, Director of Advisory for MLA Canada. \u201cResale market pricing and sales momentum for Spring 2025 will be a leading indicator for other asset classes, specifically the presale market.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>The Fraser Valley Market Will Continue to Outpace Metro Vancouver<\/strong><\/p>\n<p style=\"text-align: justify;\">Increased foot traffic at sales galleries across Metro Vancouver and the Fraser Valley has yet to translate into a major shift in sales, with the market remaining at levels seen throughout 2024. As market headwinds continue to blow, expect the Fraser Valley market to outperform its urban counterpart, thanks to lower relative price points and preferable product form (more lowrise units and townhomes, and fewer high-density condominiums).<\/p>\n<p style=\"text-align: justify;\">According to MacDonald, demand is slightly higher in the Fraser Valley than Greater Vancouver, as the lower prices appeal to a larger buyer pool, and buyers eschew location for well-positioned real estate with unique value propositions and long-term investment potential.<\/p>\n<p style=\"text-align: justify;\"><strong>Developers Will Offer Creative, Flexible Buyer Incentives<\/strong><\/p>\n<p style=\"text-align: justify;\">The days of selling out inventory over the course of a weekend have given way to a myriad of homebuyer incentives, including flexible deposit structures, mortgage buy-downs in the form of buyer credit, and rental guarantees for two years post-completion.<\/p>\n<p style=\"text-align: justify;\">\u201cThe number one lever that is leading to success is a lower, or extended deposit structure. Effectively, when developers lower the barrier to entry\u2014in this case, downpayment\u2014it becomes easier to rationalize a pre-sale purchase,\u201d says MacDonald.<\/p>\n<p style=\"text-align: justify;\">Additional incentives, such as credits and decorating allowances, are also common, though MacDonald cautions against these tactics, \u201cas almost every project is offering a \u2018deal\u2019 of some sort, making the marketing landscape noisy and tough to stand out in.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>A &#8220;New Normal&#8221; will Emerge<\/strong><\/p>\n<p style=\"text-align: justify;\">Challenging economic conditions have been met with complex red tape and increasing fees from all levels of government, rendering housing more difficult and costly to deliver than ever. As affordability weakens, fewer buyers can qualify for a mortgage and purchase a home. As MacDonald points out, \u201cIt is unlikely that we will see the whipsaw market reaction we experienced during 2020, where demand far outpaced available supply, and immense pressure was put on homebuyers and industry stakeholders.\u201d<\/p>\n<p style=\"text-align: justify;\">Instead, MacDonald foresees a \u201cnew normal\u201d characterized by steady, month-over-month sales and price increases in the resale market, followed by a trickle-down into the presale market, where the level of speculation and required market confidence is higher for homebuyers.<\/p>\n<p style=\"text-align: justify;\">The remainder of 2024 is expected to lay the groundwork for the larger recovery projected in the years ahead, positioning Q4 as a critical juncture in the market with two rate announcements remaining before the end of the year. The next Bank of Canada rate announcement is scheduled for October 23, 2024.<\/p>\n<p><a href=\"https:\/\/mlacanada.com\/newsfeed\/lower-rates-higher-stakes-five-things-to-expect-in-q4-and-beyond\" target=\"_blank\" rel=\"noopener\">Higher Stakes : Five Things to Expect in Q4 and Beyond<\/a> by MLA Canada<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Bank of Canada solidified its position on quantitative easing with a third consecutive rate cut in September, trimming the benchmark rate by a quarter-point to 4.25%. As we move &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2024\/10\/emerging-housing-market-new-normal-rates-easing-cycle-flexible-pre-sale-incentives-in-q4-and-beyond\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-24757","post","type-post","status-publish","format-standard","hentry","category-market-updates","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Emerging Housing Market &quot;New Normal&quot; : Rates Easing Cycle, Flexible Pre-Sale Incentives in Q4 and Beyond &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2024\/10\/emerging-housing-market-new-normal-rates-easing-cycle-flexible-pre-sale-incentives-in-q4-and-beyond\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Emerging Housing Market &quot;New Normal&quot; : Rates Easing Cycle, Flexible Pre-Sale Incentives in Q4 and Beyond &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"The Bank of Canada solidified its position on quantitative easing with a third consecutive rate cut in September, trimming the benchmark rate by a quarter-point to 4.25%. As we move &hellip; [read more]\" \/>\n<meta name=\"twitter:creator\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:site\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rory Clipsham\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2024\\\/10\\\/emerging-housing-market-new-normal-rates-easing-cycle-flexible-pre-sale-incentives-in-q4-and-beyond\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2024\\\/10\\\/emerging-housing-market-new-normal-rates-easing-cycle-flexible-pre-sale-incentives-in-q4-and-beyond\\\/\"},\"author\":{\"name\":\"Rory Clipsham\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"headline\":\"Emerging Housing Market &#8220;New Normal&#8221; 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