Denise Paglinawan

Advertisement 1 Share this Story : Bank of Canada's string of rate cuts not enough to 'resuscitate' housing market, experts say Bank of Canada's string of rate cuts not enough to 'resuscitate' housing market, experts say Effects not likely to be felt for some time Author of the article: Article content On Wednesday, the Bank of Canada cut its benchmark interest rate by 25 basis points for the third consecutive time, bringing it down to 4.25 per cent. Economists are predicting further interest rate cuts by the central bank for the remainder of the year and into 2025. Here's what experts have to say about the impact of the cuts on Canada's real estate markets: Advertisement 2 Article content Bank of Canada's string of rate cuts not enough to 'resuscitate' housing market, experts say Back to video ‘It will take several more decreases': Rates.ca While it is good news that the Bank of Canada is continuing to lower its overnight rate, the effect on the housing market will not likely be seen for some time, said Victor Tran, Rates.ca's mortgage and real estate expert. For every 25-basis point drop, a homeowner with a variable-rate mortgage can expect a reduction of approximately $15 in monthly payments per $100,000 of mortgage, according to insurance comparison website Rates.ca. Tran said fixed-rate mortgage holders will not see the effects of any mortgage rate decreases until they renew. He noted that housing market activity in major urban centres like Toronto and Vancouver has not picked up nearly as much as expected in recent months. Despite the previous rate decreases, mortgage rates remain quite high, he added. Advertisement 3 Article content Even a drop of a full percentage point from current mortgage rates would not result in a significant increase in buying power given persistently high home prices , he explained. “Mortgage rates have not come down nearly fast enough to stimulate much activity in the housing market. It's just not affordable for people,” Tran said. “It will take a significant decrease in mortgage rates before we see a return of housing market activity.” Considering the national average price of a home is approximately $700,000, a single percentage point decrease would likely not make a significant difference in a potential homeowner's ability to purchase the property, he said. According to Rates.ca's mortgage quoter, the lowest insured five-year fixed rate mortgage sits at 4.34 per cent, and the lowest insured five-year variable rate mortgage sits at 5.4 per cent. Advertisement 4 Article content ‘Not going to resuscitate the housing market': Nerdwallet Canada This latest rate cut from the Bank of Canada will make things a little easier for mortgage shoppers committed to variable rates, but it's not going to resuscitate the housing market, says Clay Jarvis, Nerdwallet Canada's mortgage and real estate expert. There have been significantly lower fixed rates available to buyers all year. If they're not succeeding, it's probably due to other factors, such as high home prices, increased debt loads , diminished savings and worries about the economy, he said. A slight dip in variable rates doesn't lower any of these barriers to the market, he noted. ‘The key question is whether to buy now or wait': Royal LePage Advertisement 5 Article content With this recent rate cut, the key question for first-time homebuyers is whether to buy now or wait, said Phil Soper, chief executive at Royal LePage Real Estate Services Ltd. The Bank of Canada continues its delicate balancing act, gradually easing the economic drag of high interest rates as the economy cools. With inflation now at its lowest point in three years, policy makers are shifting their focus to jobs and housing, noted Soper. On one hand, home values have largely plateaued this year and affordability has improved due to lower borrowing costs, he said. However, once the backlog of sidelined buyers is released into the market, pent-up demand will drive prices higher. “This fall, we can expect more cautious Canadians to take the plunge, while those willing to take on the risk might hold out for further rate cuts,” Soper said. Advertisement 6 Article content Housing remains challenged: Macquarie Despite rate cuts, housing in Canada remains challenged with existing home sales subdued and renovation spending slowing, noted David Doyle, head of economics at Macquarie Group Ltd. Doyle said the share of consumers expecting real estate prices to rise has slid in recent weeks and rests below levels seen when the rate hike cycle commenced. This acts as embedded tightening that is set to worsen in 2025 and 2026 and will be a drag on housing resales, renovations, and discretionary consumer spending, he said. He added that the Bank of Canada likely needs to reduce rates to a lower level than the United States Federal Reserve over the coming 12 months. Anticipate further rate relief: Bank of Montreal Advertisement 7 Article content Canadian mortgage holders should anticipate further rate relief after borrowing costs peaked late last year, said Bank of Montreal senior economist Sal Guatieri. Douglas Porter, chief economist at BMO, said the Bank of Canada has hinted at more aggressive rate cuts if inflation slows faster than anticipated — although they have not been surprised by recent trends. Porter said the bank is expected to continue grinding down rates in coming meetings. “While we anticipate a series of 25-basis point steps into early next year, we certainly will not rule out a possible 50-basis point step at some point,” he added. • Email: [email protected] Bookmark our website and support our journalism: Don't miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here Want to know more about the mortgage market? Read Robert McLister's weekly column in the Financial Post for the latest trends and details on financing opportunities you won't want to miss. Article content Share this article in your social network Share this Story : Bank of Canada's string of rate cuts not enough to 'resuscitate' housing market, experts say Comments Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Latest National Stories News Near Elliot Lake Featured Local Savings

Availability has not kept pace with the growth in demand for post-secondary education

Plans to suspend flight operations as early as Sunday to mitigate the impact of a possible strike by pilots

Most want a raise to keep up with prices, but pay increases also play a role in inflation

Canadian Chamber of Commerce says impact of a labour disruption by pilots would be far-reaching Article content

Advertisement 1 Share this Story : Air Canada strike would significantly disrupt supply chains, business groups warn Air Canada strike would significantly disrupt supply chains, business groups warn Canadian Chamber of Commerce says impact of a labour disruption by pilots would be far-reaching Author of the article: Article content Business groups have expressed “deep concern” over the looming pilot strike at Air Canada , which they said would significantly disrupt Canada's supply chain. Advertisement 2 Article content Air Canada strike would significantly disrupt supply chains, business groups warn Back to video A labour disruption would not only affect the thousands of passengers the airline flies daily but also its cargo operations, Air Canada has said. In response, the Canadian Chamber of Commerce wrote to federal labour minister Steven MacKinnon on Wednesday, warning of the impact this would have on businesses' ability to deliver goods to market on time. “The potential for a labour disruption is alarming, given the wide-reaching implications it would have on Canadians, the nation's economy, supply chains and our global reputation,” said the letter signed by 41 business groups and 53 local chambers of commerce. Signatories include the Canadian Association of Importers and Exporters, Canadian Federation of Independent Business, Retail Council of Canada, along with various industry associations, representing companies in the resource, energy, retail, and food sectors. Advertisement 3 Article content The groups say the impact of a labour disruption at Air Canada will ripple throughout the economy, affecting Canadian consumers, employees and businesses. Air Canada's cargo network is important for the import and export of critical, time-sensitive goods, they said. These range from vaccines and medical supplies to agriculture and perishable food products; parts and machinery for small- and medium- sized manufacturers. The letter also emphasized that Air Canada Cargo is responsible for shipping radioactive isotopes both domestically and internationally. The isotopes have a 48-hour lifespan and are crucial in treating cancer patients. “A disruption in this service, however short, would be devastating,” the business groups said, “as no other means of transport can meet the stringent time requirements for these products.” Advertisement 4 Article content Air Canada and Air Canada Rouge operate close to 670 daily flights on average carrying more than 110,000 passengers within Canada or internationally. The airline has said that Air Canada Cargo carries perishable or live commercial goods, components for manufacturers and other time-sensitive items in the belly holds of its aircraft and air freighters every day. The company said Monday that it has already begun limiting acceptance of some of these goods due to average shipment timelines. The letter noted that the timing of this potential strike could not be worse, given the recent labour disputes that paralyzed Canada's t wo major rail networks , adding that in the last year there have been disruptions, or threats thereof, at ports in Montreal and British Columbia, the St. Lawrence Seaway , the Canadian Border Services Agency and WestJet Airlines Ltd. They said that international partners of Canadian businesses will begin to seek permanent alternatives if they are unable to deliver goods to market on time. The groups urged the federal government to “take decisive action” and “be prepared to act in advance” where a neutral arbitrator can resolve any outstanding issues. • Email: [email protected] Bookmark our website and support our journalism: Don't miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here Article content Share this article in your social network Share this Story : Air Canada strike would significantly disrupt supply chains, business groups warn Comments Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Latest National Stories News Near Elliot Lake Featured Local Savings

A two-week pilot strike at Canada's largest carrier could result in losses of $98 million a day

Advertisement 1 Share this Story : Air Canada strike could cost Canada's economy $1.4 billion, economists estimates Air Canada strike could cost Canada's economy $1.4 billion, economists estimates A two-week pilot strike at Canada's largest carrier could result in losses of $98 million a day Author of the article: Article content The potential labour disruption at Air Canada could cost the economy $1.4 billion, according to a new report from Fédération des caisses Desjardins du Québec. Advertisement 2 Article content Air Canada strike could cost Canada's economy $1.4 billion, economists estimates Back to video Economists Randall Bartlett and LJ Valencia, estimate that a two-week pilot strike at Canada's largest carrier could result in daily losses of roughly $98 million, a 0.06 per cent month-over-month loss to real GDP in September. “Because of its outsized role in the Canadian airline market, a prolonged pilot strike could negatively impact economic activity,” they wrote. The number of passengers could decrease by 2.1 million, a 29 per cent decline from the previous month, they added. Air Canada and Air Canada Rouge operate close to 670 daily flights on average, carrying more than 110,000 passengers within Canada or internationally. Air Canada Cargo is the country's largest air carrier of goods by capacity. Air Canada pilots could walk off the job as early as Sept. 18. The airline is preparing to wind down operations as early as Friday, in preparation for Sept. 15, when either the union or the company may issue a 72-hour strike or lockout notice. Advertisement 3 Article content Air Canada said its talks with the Air Line Pilots Association (ALPA) was nearing an impasse over wage demands. Business groups on Wednesday expressed “deep concern” over the looming pilot strike, which they said would significantly disrupt Canada's supply chain. “The potential for a labour disruption is alarming, given the wide-reaching implications it would have on Canadians, the nation's economy, supply chains and our global reputation,” said the letter by Canadian Chamber of Commerce signed by 41 business groups and 53 local chambers of commerce. Advertisement 4 Article content The group was to hold a press conference in Ottawa on Thursday to urge the federal government to take action to prevent the potential labour disruptions. The Desjardins economists said their study assumes a strike would last two weeks, similar to the last major Air Canada pilot strike in September 1998. During that time, Air Canada's losses were estimated at $200 million, or approximately $355 million in today's prices. • Email: [email protected] Bookmark our website and support our journalism: Don't miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here Article content Share this article in your social network Share this Story : Air Canada strike could cost Canada's economy $1.4 billion, economists estimates Comments Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Latest National Stories News Near Elliot Lake Featured Local Savings

A two-week pilot strike at Canada's largest carrier could result in losses of $98 million a day