"First Bank Of Canada Interest Rate Cut In June", RBC
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- Опубликовано: 25 июн 2024
- As we start to move into the later half of May, and get closer to the next Bank of Canada (BOC) interest rate announcement on June 5, 2024, there is a lot more chatter going on as to when the BOC will make their first rate cut to the overnight interest rate.
In today’s video, Surrey Real Estate Specialist, Steve Karrasch of Macdonald Realty provides his opinion on when he believes the BOC will start to cut rates and more importantly what effect rate cuts will have on the real estate market and consumer sentiment.
#SurreyRealtor #SurreyRealEstate #interestrates
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The opinions expressed herein are solely that of Steve Karrasch PREC and not Macdonald Realty or the FVREB and should not be misconstrued as advice or the basis of an agency relationship whatsoever. Please consult your professional advisor prior to taking action on any decisions relating to the matters discussed in these videos. This communication is not intended to cause or induce breach of an existing agency agreement.
No cut in June
id be shocked if they cut the interest rate in june
Agree with your conclusion. If Canada cuts but US does not, the Canadian Dollar will fall vis a vis the USD. As we trade mostly with US, it will trigger higher inflation in Canada.
@@fspike2469
Labour/Services account for 50% not everything is based off of US/Global imports
I'm ready, I just recently switched all my TFSA from Cdn $ to USD and went all in on PLTR and NIO. Selling covered calls and retiring my wife.
@@DummMoney-rr1fiNIO bro?!
5-10% should be the minimum.. low interest rates aren’t good for anyone.
good for the rich to get richer
@@bilsid no. The reason why houses are the way they are is because low interest rates allow people who maybe shouldn’t be buying a house at that point in time to purchase more than they have purchasing power for. It also allows people to use housing as an investment with a greater return than actually investing their money in the economy and making Canada a better place.
Higher investments force people to save more to purchase their house enforcing better spending habits and it fights purchasing housing as an investment.
With housing prices this high now, you crazy?
@@elephantmoney When interest rates rise, the housing prices will come down. it's simple maths.
@@bilsid Yes, will also crash the economy
It’s selfish of the BOC to bail out debt holders by sacrificing the CAD.
Selfish for the government and in turn (some) voters to hinder the energy sector and promote carbon taxes that weaken the dollar
It's about inflation, not debt.
@@SteveKarrasch if the CAD goes down It will cost more money to import US goods therefore it’s going to create more inflation. It is not good for Canada as you said it is about inflation 😅
@@ndiouma are we not exporting to the US as well
@@vert911It's not just what we import from the US, it's practically anything we import from any country as just about all trade is done in USD. Fruit and veggies from Mexico, electronics from China, semiconductors from Taiwan...all USD.
In 2008 Canadians were in less debt than Americans. In 2024, we are the world champions of debt. So, a wider gap between US and Canadian rates will impact the loonie a lot more adversely than in '08.
Canada is the number 1 country that will suffer tremendous economic disaster very soon. Australia and New Zealand are right on its heels...
They won't drop rates. They want to foreclose on home owners and give them the "you own nothing" experience
All the banks are betting big on a rate cut. Will be a crisis if they don't cut.
They don't have a choice but to cut rates.
No, the people that currently own nothing “‘will own nothing and be happy”
@@stevenvanderheide6472 the people that own, will own something, grow wealth and be happy
They will.. just watch and stop following your nonsense
June cut is coming . It’s hard to run any business. I understand ppl looking for roof want to see higher rates . Ppl like us has nothing to do with housing. We just trying to protect our business. Hard to survive when sale crashes 60%
Sales in MANY businesses are WAY down.
Our flooring guy seconds this thesis
My boss says the same thing. He said what we are not seeing are businesses failing. I don’t think they will cut until November but my boss said they have to in June or July 🤷🏾♀️
No cuts ever. 5% should be the minimum
Come on now brah!
@@SteveKarrasch
What is your argument to lower rates? What is the long benefit to that?
@@TravisSloat-ln2xv So he can make more money selling overpriced properties, obviously.
@@TT-fq7plyou got it. Hope people are finally waking up.
@@TravisSloat-ln2xvbuilders net profit is 2-5% for homes. Interest rates kill that. There is no incentive to build with current capital restricted market. This makes it worse.
Even if it cuts by .25% they are still high. What are you on fella? LOL. People bought at 0%.... We are still so high at 4.75. Also, its not going to happen in June. We will be lucky to see one in December.
You're the one on somethin' bruh
@@SteveKarrasch Sure am :) Only the high quality H20 haha.
He literally said in the video it doesn't change anything, except sentiment
No cuts at all
Haircuts?
Only cuts that will happen in June is job cuts and haircuts
I'm cutting calories.
Rate cutting cheers leaders are in full force and they’re out of control..with 5% interest is very very difficult for them to flipping houses oh my goodness!
Anti flipping taxes make it even harder.
Whos in for my next 736 day flip?
No one is flipping anything .. you can get back to mcds and flip burgers if you like
More curious about where they’ll be in say, a year from now.
Do you expect over the next year that there will be multiple rate cuts beyond the probable July-September one?
You would if you listen to Royce Mendes of Des Jardins. His prediciton is a cut every single announcement date left this years, so 5 cuts, and then more next year lol
Why would we want to lower rates at all? Are rates now not far below what was considered normal before the early 2000's and home prices started becoming unaffordable?
Historic over night average rate is 4.5%
@@SteveKarrasch going back to what year?
So u want 10% interest rate on million dollar homes. 10% was when ur fuckin parents would buy a house for 30,000 dollars.
Hi Steve. I'm going to take the bold position of disagreeing with you and what most people are anticipating that there will be no cut this summer. My reasoning is simple, and I'm being serious, I don't think that things have become bad enough. If the economy stabilizes at 5%, which is still a real possibility, I don't see the BoC having any incentive to cut rates. Additionally, and not a swipe at you or anyone else, but if people continue to assume that they will cut, this 'may' influence the BoC's decision not to make any rate cut. Anyways, hope your doing well and see you next time!
I think if Canada cuts rates ahead of the US, but the US cuts rates within 6 months so the difference between rates stays marginal, then the pressure on our dollar would also be marginal. Our exports would see a benefit. The main downside that people might actually feel is when purchasing their toys from abroad. Pretty sure everything we purchase in Canada comes from abroad.
Any cut kills the dollar and real inflation, not the CPLie will spike.
This video proves that is not always the case.
@@SteveKarraschcomparing 2008 to the current Canadian economic situation doesn’t make sense. We were in a much better position in 2008 compared to today by almost every metric.
It’s kinda comical how a lot of realtors think they can speak authoritatively about stuff they know very little about, like the economy. Most people wouldn’t take medical advice from a realtor but will take financial advice from them 😂
Curious..:do you have any formal education in finance or economics?
The real economists are in the comments.
BOC's job is not to prop up real estate or even to avoid the economic cycle newrly help navigate yhat cycle.
Yes in 1990 our rate was lower because we had a much lower Govt & household debt and we were shipping oil/gas. Which is not the case now
My suggestion is you look at mexicos reaponse. There interest rate is xurrently 10% . The peso is killing rhe usd and canadian dollar.. interest can fall or rhe canadian sollar will be worth lees then the mexican peso in 5 years
I’ll take that bet.
@@SteveKarrasch just an opinion .. either way.. Canada is in huge trouble.
I'll take that bet too.
@@DummMoney-rr1fi 25% to mex peso already in a couple years and in 10 yrs 40 % to the usd. So like I said hope I'm wrong but with the current economic structure being unable to manufacture because of insurance costs and energy costs Canada is toast unless it changes direction. Inflation using 1980s numbers is double what the liars are saying it is now and so is the jobless rate. But honestly the biggest thing is nobody trusts Canada as far as they can throw it now.. just look at the TD bank and honestly they all have been involved.
The only reason they're going to cut is when the wheels fall off the economy. I think June is a bit too early.
Wait too late
Way too late already. I'm itching to put my equity in RE somewhere soon.
ln 2008 the US economy was getting hit massively while Canada was not hit nearly as hard. Thats why the loonie was strong despite lower interest rates back then. The opposite is true this time. US strong, while we’re much more at risk….
I think you’re right: rates will drop later than everyone thinks, and I think they’re gonna drop by less than everyone wants. We are at the “average rate” over a 30 year history. Everyone thinks they’re “high.” They’re not. This is normal. What we saw during Covid wasn’t. Trying to plan based on rates is a fool’s game. Buy the most house you can. Pay it. You’ll be rewarded long term.
Great information! So my mortgage is up for renewal June 5th...would you suggest a 3 or 5 year fixed? I'm hoping to move within a year 🙏 but it all depends on inventory. What do you think?
Lowest rate smallest penalty.
Do you think the new inflation report coming out this week will have any impact on the B.O.C’s decision to change the overnight rate June 5th?
Of course!
All the realtors (besides you Steve) were promising spring rate cuts that's why the huge inventory right now. A lot of these sellers prepared their properties for this market thinking it would be bidding wars. Now if there is no June rate cut its not gonna be pretty, some will terminate and try again in the fall, but others will just sell at whatever price they can.
Just underpriced it
cutting rates weakens your currency vs workd currencies...imported products cost more therefore you run the risk of importing inflation....and cad was equal to usd when oil prices were super high because cad is a natural ressource economy
No cut in June.
Haircuts yes I don’t like getting haircuts in June
I think a first cut in July then a pause in t and then another quarter cut after that. Beyond that is even more of a guessing game. Too many variables.
I think the first interest cut will spur buyer sentiment and uninformed buyers will dictate the gradual upward long term trend in prices. It will be slow because more sellers will aslo list.
Maybe 1 0.25% cut this year at best
No cuts in 2024. Maybe 2025 if you're lucky
I’m lucky.
Now that Tom took a fixed rates will plummet
Rates regardless of 2 percent target will have to be cut
Haven’t the experts been saying that since spring 2023.
I think if the BOC cuts the rates, it will also lower the bond inventors' expectations and the yields on bonds will fall, leading to lower fixed rates. The fixed rates could fall even faster, as the market will expect even more cuts; they overreact all the time. It happened last year too, just with the expectations of cuts.
That happened last year because it was looking like the US would cut at the same time, they had banking failures and the bond market thought lower rates were coming. This year the US is a lot more hawkish, if Canada cuts before them the bond yields may still stay high, and could even go higher if the Canadian dollar loses value.
I believe Tiff so badly wants/needs to cut June 5th but he’ll hold off to hear Powell and one more FOMC presser on June 12th. My hundie’s on first cut in July.
This makes sense
When rates will come down below 1%?
2020
BET 300% = 👎 👎 👎 NO
I have been saying first rate cut in June since late 2023. However now think July or later !
Not the RBA
No cuts Sharp correction.
Not sure why 5% is considered too high. Did the buyers not get approved at a minimum 5.25% qualifying rate? Currently fixed rates are hovering just around that rate. So what is everyone so afraid off? Did they chew on more they could bite?
I think it's more about lines of credit being over 10% when people were comfortable with them at 5%
If BOC don't lower the rate everything will crash. Housing in Canada is main artery...
They will raise the rate and tighten the noose ..
Only 25 freakin points?! Oh man...
Rate cuts yes please 🙏
Second that
Are we complaining that someone won't give us free money?
We should try to avoid taking on unnecessary debt.
They better not lower rates.
Hope for the best, prepare for the worst.
No cut ever. This is the new bottom. Up up up up from here.
No cuts to rates get over it, the cheap money is gone. Following the FED is the sound plan for Canada.
Money markets wouldn’t pay 5 percent if there is a rate cut coming
How do they know?
They pay the current rate
Forget about any cut in 2024.
If they want 2% inflation back then they got to raise interest rates higher.. 5% ain't doing it.. no sense of cutting rates of they want to combat inflation..
If the loonie half’s but my house price doubles do I really care ?
Depends.
If all your wealth is in your house, commodities market, out of Canada companies and you have no liquidity in Canadian banks or burried cash. Also not earning or eating in Canada would also help.
If you're in this position
Then no, you shouldn't care.
The BoC just wants you to think they're cutting in June. I see no real reason for them to cut rates in June.
The banks are gambling big on it.
there will be a cut in June...
A .25% decrease is not going to make any difference in your monthly payments for most people who purchased in 2019/2020. People are stretched to max and should just sell as inventory is increasing price it right and exit you will sleep better
21/22 maybe.
Cutting rates would be irresponsible. We need a good period of pain in the economy and unemployment to rise. It would be healthy and necessary. I hope the BOC won't catter to the irresponsible people and sharkish financial institution advocating for cuts.
Have to agree with you BOC will cut when its too late but it i believe it wont happen in summer because cutting would makes sense in the summer
BOC makes no cents ;)
Rates need to go up not down.
I've yet to hear someone who carries a lot of debt make that argument
What, you must be rich
I'm debt rich but much less debt rich than 2023
No cuts, increase the pain levels
Sadist
No cuts
Cold cuts?
No rate cuts.
Once the bond market has confirmation expect to see the yield curve to un invert and you’ll see 5 years bonds at the overnight rate. 150-200 basis points higher than they currently are.
Quit praying for lower rates and pay off your debts. Pretty simple stuff
😂 BoC will say "I didn't say which year in June. I just said we will cut in June."
**Goes onto June 2025**
😂😂😂 that an announcement difficult to understand
The RBC makes money on morgages they want you to take them this could just as easy be a nugg to get people back into the market, yes we can lower rates vs the US but that often causes issues with trade etc so I don't think we are as likely to do it as you think. And to be honest I expect the gov is fudging the numbers a bit to show inflation down but truth is my cost are still way up but their is an election coming and Trudeau need to buy votes
True, you really cant trust anything that a bank or real estate association says. They have a vested interest in real estate selling and prices always going up, part of the fomo machine.
Rate cuts are coming, take the money now, buy now or never, FOMO folks are active. Kardashian is advising on financial decisions now.
Not going to happen. 400k people in 4 months? Canada is going in a bad direction. Things are looking bad into 2028.
cut are always 3 months away
That’s the same timeline as the crash.
So much to unpack, but I’ll just say a lower Canadian dollar doesn’t help. That’s an economic myth. Unless of course you’re in real estate and selling to foreign buyers. Look at everything from gas, which is priced in US dollars, to just what is sold in the grocery stores that’s imported (fruits and vegetables). A large percentage of farm equipment, manufacturing equipment and parts, are all imported from the US and abroad. The consequences would be devastating to the country.
Can foreigners buy real estate in Canada again?
@@SteveKarrasch so lets ignore the low dollar ramifications to the country and discuss foreign buyers? Okay.. So the foreign buyer rules didn’t ban all foreign buyers. International students and temporary workers could still buy homes. Then according to global news, more rules around the ban were loosened. Soooo yeah, if the dollar drops, Canada becomes more attractive to buy in, and harder for its own citizens. Make sense?
Your friend Nolan recommended variable rate at the worst time possible
So you must love me for saying always pick a fixed rate. Always
I made the same recommendation I always make, lowest rate, minimize penalty risk. Large majority of the time it’s the right call. I also said to consult a professional so you could assess your risk tolerance.
@@NolanMatthias people who took your professional advise is getting bent over and no lube
Macklem will cut in June. He wants to show courage.
Attempting is the word, NOT efforting! It's not a fucking word!!!
Efforting
Unpopular opinion here. Cut this summer either June or July.
Very unpopular
I'm a proponent of cuts along with all my renter's paying 60ish % of their after tax income to pay my RE bills
How do you pacify the peasants? Give them free stuff... promise them changes coming soon...it will get better. Kick that can.
Because inflation (mass migration and increased taxes)...will surprisingly rise in May and June... no cuts this year.
No cut now cuz no elections yet.
Lower those rates. Show me the money.
Show me the cheap money!
Yasss, I'm ready and well pre qualified. Too bad Steve doesn't sell on the island or the interior.
I think US will cut rate. This is for their own political reasons. Government wants everyone to be happy. Canada will follow US
Just in time for the election.
Inflation target is 2%, current inflation is 3%+. How can there be a cut? You would need employment picture to hit disaster levels to justify a cut. If they cut without inflation declining or employment disaster, they will lose all credibility and Canadian dollar will hit the toilet
It's actually 2-3% (and we are there).
@@SteveKarrasch their inflation Target is not two to three. It is two just like the US
Also what do you think copper increasing 40% to a near record high? Good for inflation? @@SteveKarrasch
@@BeR8al take out RE mortgage inflation and it's way below 2%. I get all my facts from RUclips.
Lol @@DummMoney-rr1fi
Isn't this the guy making incorrect calls for years now
nope
1/4 cut in June and another 1/4 cut in July
I don’t think so.
That would be a good start back to prosperity for the working middle
do you people ever stop talking
? you all say the same thing over and over and over again
Hopefully god helps 🙏
Think Tiff will listen to him?
I'm praying tomorrow in the first row of church. Then watching Scottie make a comeback at the PGA. Go Canucks