The Bank of Canada is getting what seems like unusual advice from one of the country’s leading real estate companies.
Royal LePage says it’s worried a further rate cut might add fuel to some of Canada’s already red hot housing markets — a position that may seem at odds with a typical stance from realtors that all rate cuts are good because they make borrowing cheaper and bring more buyers into the market.
“We believe an additional interest rate cut, which has been discussed with increasing frequency in recent weeks, would be inappropriate policy at this time,” said Phil Soper, chief executive of Royal LePage, in a report Tuesday.
“The country’s all-important real estate market simply does not need a rate cut.”
The firm’s second quarter market survey found the average price of a home in Canada increased between 3.9 per cent and 7.5 per cent over the same period last year on a national basis. During the period, prices in the detached bungalow segment were up 7.5 per cent to $438,938, standard two-storey homes rose 6.8 per cent to $471,002. and condominiums appreciated 3.9 per cent to $268,583.